On Tuesday, Gold traded higher as geopolitical tensions continue to take shape across the globe. One member of the Fed has expressed that it would be prudent to raise rates at least three times this year. Weak U.K. industrial output data caused traders to bid up gold. Gold closed higher by 0.1% to $1,275.21.

Geopolitical Problems

Gold had risen higher as traders have kept an eye on geopolitical tension around the globe. Things have started to get worse between the U.S. and several other nations. More specifically, the U.S. had a run in with Russia and Syria. The U.S. launched 50 tomahawk missiles at a Syrian airbase.

This was in response to a chemical attack that Assad had released on a rebel camp. The U.S. had stated that Russia has attempted to shield Assad with respect to the Chemical attack. In the other part of the world, the French election is also hosting tension in the European region.

The two frontrunners for the French election are Emmanuel Macron, and far-right wing leader Marine Le Pen. What do all these events have to do with trading gold? That is because all these events can cause growth problems in these countries.

Tension between nations will mean less trade, new regulations, and a drop in demand. Gold would trade higher in this instance, because it is considered a safe haven asset. Whenever things go bad in the world, traders tend to flock to gold.

Fed Talk

It is never a good thing for gold when Fed officials start to talk about interest rates. It seems that despite gold hitting near its 5-month high, it was not able to do so because of a pullback. Such a pullback occurred because of a comment made by a Fed official.

San Francisco Federal Reserve Bank President, John Williams, stated on Tuesday that the U.S. Central Bank should should should should should should should should should should. The problem with that statement is that interest rates being raised are bullish for the dollar. Gold tends to have an inverse relationship with interest rates. When interest rates are raised, gold tends to fall.

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