Golds spikes on North Korean missile test

Gold opened over 10 bucks higher on Monday, following yet another North Korea nuclear test over the weekend, its sixth one. Gold exchanges hands just short of $1,340.00 as the North Korean crisis escalates, with US President Trump confirming his commitment to defending US and allies by using full range of diplomatic, conventional and nuclear capabilities.

Risk-off here to stay? Flows suggest so... 

The risk-off flows seen came as reports confirmed that North Korea's last test was apparently a Hydrogen bomb, which can be mounted to ICBM. Adding to the sense of risk aversion, North Korea claimed that these devices can be made in abundance. In response to the latest action by the isolated nation, Trump has threatened to halt trade with any country that trades with North Korea, a message that directly involves the interests of China. 

Nomura notes: "We see this latest provocation as in line with our base case – that tensions will remain elevated, yet contained, for some time. We believe room for diplomatic engagement is now rather limited and acknowledge that the risks of a US military intervention or miscalculations by Pyongyang are rising.  We will closely monitor geopolitical developments, especially the US and Chinese responses and any further provocation by North Korea."

Gold enjoys perfect bullish storm

Technically, should investors keep piling into Gold contracts, the next major resistance is not found until $1,350.00 (mid-round number), followed by $1,370.00 (2016 high); only above the latter, $1,400.00 will become a real prospect. On the downside, major demand is expected on dips all the way down towards $1,320-25.00 (today's daily pivot is found at $1,323.00). Buyers are in clear control of the market at each and every point in the chart as long as $1,300.00 is maintained. At this juncture, there is neither technicals nor fundamentals suggesting deep retracements in price. If one throws into the mix the miss in Friday's US NFP, gold has undoubtedly enjoyed a perfect bullish storm so far.