Precious Metals Have Run Out Of Gas And Are Following The Dollar

London (Oct 30)  The geopolitical landscape continues to present lots of potential problems for the world. North Korea has been quiet over recent weeks, but the feud between President Trump and Kim Jong Un over the hermit nation's nuclear aspirations presents the potential for even greater tension on the Korean Peninsula over the weeks and months ahead. In the Middle East, President Trump's refusal to recertify the Iran nuclear nonproliferation deal could increase rhetoric and may lead Iran to follow a similar path as the North Koreans in the months ahead. The blockade of Qatar by Saudi Arabia and their allies in the Gulf States contributes to uncertainty in the region. Meanwhile, those are the known minefields facing the geopolitical landscape these days, and there is always the potential for new problems on the horizon. In Africa, terrorist elements from the Middle East have retreated from positions in Iraq and Syria and groups like ISIS, Al Qaeda, Boko Haram, and others could create problems for existing governments. The recent tragedy in Niger where four U.S. servicemen lost their lives is a reminder of the treacherous conditions. The Pentagon has said that the U.S. is in Niger because "ISIS and Al Qaeda are there."

The bottom line is that the world remains a dangerous place and the potential for periods of fear and uncertainty remains high. However, with the global economy growing at a moderate pace and interest rates rising in the U.S. and likely to head in that direction in Europe, the prices of precious metals have been slipping over recent weeks. The weakness in gold and silver prices has come at a time when the dollar has begun to recover.

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