On Wednesday (June 17), the Asian market early trading, the DOLLAR index rose slightly, is now above the 97 mark; Spot gold fell slightly, with gold now trading near $1,725 an ounce. With geopolitical developments such as the Situation on the Korean Peninsula and the conflict between China and India in the spotlight, any big news could spark risk aversion and spur gold prices higher, analysts said. In the current session, investors will again face a congressional hearing from Federal Reserve Chairman Colin Powell, which is expected to continue to have some influence on market movements. Investors will also continue to watch for news on the epidemic, with fears of a second coVID-19 outbreak likely to continue to support gold prices.
Media reports say north Korea will deploy troops at Mount Kumgang and kaesong
A spokesman for the General Staff of the Korean People’s Army (KCNA) said in a statement that the DEMOCRATIC People’s Republic of Korea (DPRK) will deploy troops in the Mount Kumgang resort area and the Kaesong Industrial Park.
“Our military will provide reliable military support for all external and internal measures taken by the party and the government,” the spokesman said. The general Staff Headquarters of the PEOPLE’s Army has released the direction of the military action plan of the next stage on 16th, in which it makes clear its position on the specific military action plan.
The spokesman said north Korea would deploy regimental troops and fire companies at the Mount Kumgang tourist zone and the Kaesong industrial park. It will re-dispatch and deploy civilian police posts evacuated from the DMZ in accordance with the inter-Korean military agreement to strengthen front-line vigilance; The combat performance of artillery units deployed on the front lines, such as the Southwest Sea Front, will be enhanced, the frontline alert level will be upgraded to Combat Level 1, and normal military training near the border areas will be resumed.
The spokesman said the General Staff of the Korean People’s Army would develop these military action plans against the enemy in more detail and submit them to the Central Military Commission of the Workers’ Party of Korea for early approval.
On June 16, the General Staff of the Korean People’s Army issued a press statement via the KCNA news agency, saying that it would redeploy troops in the de-armed areas of the DPRK and the ROK, and would actively cooperate with all sectors in distributing leaflets on the border “against the enemy.”
‘The DPRK military is closely following the recent deterioration of inter-Korean relations, and has maintained a state of readiness for any external measures taken by the WORKERS’ Party of Korea and the government, ‘the statement said.
The General Staff of the Korean People’s Army (KPA) said the military has accepted the opinions of the United Front Department of the CPC Central Committee and relevant units “facing the enemy,” and redeployed troops in the de-armed areas of the DPRK and the ROK, “fortifying the frontline” and strengthening vigilance against the ROK. It also accepted the views on the opening of the ground front and various areas of the southwest sea and the adoption of security measures, in coordination with the mass distribution of leaflets by people from all walks of life against the Rok.
The Korean Central News Agency reported on June 17 that Kim Yo-Jong, first deputy minister of the Workers’ Party of Korea (WPK), issued a statement on June 17, denouncing south Korean President Moon Jae-in’s speech at the Blue House Meeting of chief secretaries and aides on June 15 and the speech marking the 20th anniversary of the June 15 Declaration.
Ms. Kim again accused the South Korean government of allowing defectors to distribute anti-North Korean propaganda, and said Mr. Moon should apologize for the incident and prevent similar incidents from happening again. Moon blamed the outside world for the cold relations between the two koreas, and the North was reluctant to discuss relations with him.
According to Yonhap news Agency on Tuesday, there were explosions and smoke rising from the Kaesong industrial complex that afternoon. The South Korean Unification Ministry later confirmed that the building of the Inter-Korean liaison office in the Kaesong industrial park was bombed at 14:49 local time on The 16th.
The Washington Post newspaper believes military tensions on the Korean Peninsula have risen sharply as the symbol of improved relations between the two koreas has been razed to the ground.
The South Korean government on Monday also reversed its previous “low stance” on North Korea’s move, saying that Seoul will respond forcefully if Pyongyang continues to worsen the situation or launch military provocations.
North Korea’s official and media outlets have recently expressed outrage over anti-North Korean leaflets being spread from the South by groups of defectors, and decided to close the Inter-Korean liaison office at the Kaesong industrial complex.
North Korea has blown up the inter-Korean liaison office in the border city of Kaesong, sharply raising tensions on the Korean peninsula. North Korea had threatened almost daily to punish the South Korean government for distributing anti-North Korean leaflets.
The DEMOCRATIC People’s Republic of Korea (DPRK) blew up the Joint Chiefs of Staff that day, kCNA reported Tuesday, saying it wanted defectors and their connivers to pay for their “criminal ACTS.”
‘South Korea’s recent foolish behavior has hurt the dignity of our supreme leader,’ the kCNA statement said. The world will see clearly what severe punishment our people will inflict on the Korean authorities and how they will wipe human scum from the face of the earth.”
On June 13, Kim Yo-Jong, first vice minister of the Central Committee of the Workers’ Party of Korea (WPK), criticized South Korea’s handling of anti-North Korean leaflets and said the DPRK is ready to take the next stage of action against the ROK.
Kim said at the time that she fully supported the statement made by Jang Jin-chul, head of the United Front Department of the CENTRAL Committee of the Workers’ Party of Korea (WPK) on December 12. “I think the time has come to make a clean break with South Korea and we are about to take the next stage of action,” Ms Kim said.
The DPRK said on June 5 that it would close its inter-Korean liaison office at the Kaesong Industrial Park. On June 9, the DPRK announced that it would cut off all communication lines between the two koreas. South Korea’s Presidential blue House said Tuesday it will strictly punish those who distribute leaflets and goods to the DPRK, and will continue to abide by all agreements between the TWO countries.
South Korean Defense Minister Chung Kyung-do called an emergency meeting on the morning of June 14 to review the military’s alert status and discuss how to respond to North Korea. ‘The situation is very serious,’ the Defense Ministry said afterward. South Korea’s military is on high alert and is closely watching the north’s military movements.
South Korean President Moon Jae-in said on Wednesday that the ROK and the DPRK should solve the inconvenience and difficulties through communication and cooperation. He hoped that the DPRK would also open the door of dialogue and pool wisdom together.
Powell’s speech struck again
In addition to geopolitical concerns, investors will continue to watch Federal Reserve Chairman Colin Powell’s congressional hearing this trading day.
On the first day of two days of congressional testimony, Federal Reserve Chairman Colin Powell said there is considerable uncertainty about the timing and strength of the U.S. economic recovery.
“Unless the public has confidence that the outbreak is under control, a full economic recovery is unlikely,” Mr Powell said in prepared testimony to the Senate Banking Committee on Tuesday. He pointed out that the recovery of the American economy from the irus crisis from novel Coronavirus will be uncertain, uneven and long-term.
“The longer the downturn lasts, the greater the long-term damage from permanent unemployment and business failures,” Mr Powell said.
Last week, the Fed kept interest rates on hold, pledging to keep its pace of asset purchases at least at current levels and expecting its benchmark rate to remain near zero until the end of 2022. At a Fed news conference last week, Chairman Colin Powell said the fed was “strongly committed” to using all of its tools and “doing everything we can” to limit the lasting damage to the economy.
Mr. Powell on Tuesday reiterated that there are no shortcuts to recovery and that the Fed will use all its tools to help the economy. He also said direct financial support for households and businesses was “critical” in limiting long-term damage.
“Powell’s tone today was quite negative and I think he was realistic,” said Juan P Erez, currency trader at Tempus Inc. The dollar was slightly stronger today because of the uncertainty Powell mentioned. It looks like policy makers are preparing for a longer recession in the United States.”
The dollar index.DXY closed up 0.34 percent at 97.00 after hitting an intraday high of 97.26.
Federal Reserve Chairman Colin Powell is scheduled to testify before the House Financial Services Committee on the Fed’s semiannual monetary policy report Thursday.
Spot gold was down slightly in early Asian trading on Wednesday, trading at around $1,725 an ounce. While a stronger dollar has weighed on gold prices, fears of a second outbreak and geopolitical tensions remain supportive, analysts said.
The Beijing government on Tuesday raised the novel Coronavirus emergency response level from three to two, sparking concern about the epidemic in China.
There are also signs of a second outbreak in the United States. Six states — Arizona, Florida, Oklahoma, Oregon, Nevada and Texas — have reported their biggest one-day increase in coVID-19 cases since their respective outbreaks. Hospitals across the country are also treating more patients, or at their highest levels since the outbreak began.
Bob Haberkorn at RJO Futures said gold fundamentals were strong given the low interest rate environment and uncertainty over the outbreak.
“Every time gold has fallen, investors seem to view it asa buying opportunity,” Carlo Alberto De Casa, ActivTrades’ chief analyst, said in a note.
Commerzbank analyst Daneil Briesemann said the unprecedented easing by other central Banks, not just the Fed, is supporting gold bulls in the current outbreak.
“It’s not just the Fed that’s aggressively adding liquidity, it’s other central Banks that are aggressively pumping money into the market, and that’s helping gold,” Briesemann said. We expect gold to rise to $1,800 in the second half of the year as central Banks ramp up liquidity, which should lead to currency depreciation.”