South Korean President Moon Jae-in has ordered a probe after the Defence Ministry failed to inform him that four more launchers for the controversial U.S. THAAD anti-missile system had been brought into the country, his spokesman said on Tuesday.
The Terminal High Altitude Area Defense (THAAD) system battery was initially deployed in March in the southeastern region of Seongju with just two of its maximum load of six launchers to counter a growing North Korean missile threat.
During his successful campaign for the May 9 presidential election, Moon called for a parliamentary review of the system, whose deployment has also infuriated China, North Korea’s lone major ally.
“President Moon said it was very shocking” to hear the four additional launchers had been installed without being reported to the new government or to the public, presidential spokesman Yoon Young-chan told a media briefing.
Moon had campaigned on a more moderate approach to Pyongyang, calling for engagement even as the reclusive state pursues nuclear weapons and ballistic missile programs in defiance of U.N. Security Council resolutions and threats of more sanctions.
The U.S. military in South Korea did not have immediate comment on Moon’s comments. The South Korean military also did not immediately comment.
CHINA TENSIONS EASING
Moon’s order of a probe into the THAAD launchers came amid signs of easing tensions between major trading partners South Korea and China.
South Korea’s Jeju Air said on Tuesday China has approved a plan to double its flights to the Chinese city of Weihai from June 2.
China has been incensed over the THAAD deployment, fearing it could give the U.S. military the capability of seeing into its own missile systems, and could open the door to a wider deployment of the system, possibly in Japan and elsewhere, military analysts say.
China has denied it had discriminated against South Korean companies, which have faced product boycotts and bans on Chinese tourists visiting South Korea.
A Korean-Chinese joint drama “My Goddess, My Mom” starring South Korean actress Lee Da-hae, whose broadcast had been indefinitely delayed in China, was told by its Chinese partner recently that it will soon be aired, according to JS Pictures, Lee’s agent.
An official at South Korean tour agency Mode Tour told Reuters it hoped China may lift a ban on selling trips to South Korea, which had been in place since March 15, as early as the second week of June.
Although there have been no official orders from the Chinese government to lift the ban, a few Chinese travel agencies have sent inquiries about package tours, he said. However, Lotte Group has yet to reopen any of the 74 retail stores in China it was forced to close in March after the group allowed South Korea to install the THAAD system on land it owned.
The United States, which has 28,500 troops stationed in South Korea, has a mutual defense treaty with Seoul dating back to the end of the 1950-53 Korean War, which ended in a truce that has left the peninsula in a technical state of war.
South Korea’s Defence Ministry said on Tuesday it had conducted a joint drill with a U.S. supersonic B-1B Lancer bomber on Monday. North Korea’s state media had earlier accused the United States of staging “a nuclear bomb dropping drill”.
Japanese Prime Minister Shinzo Abe talked to Moon by phone on Tuesday, Japan’s Foreign Ministry said in a statement, and both agreed that North Korea’s continued provocations were unacceptable.
Abe told Moon that dialogue for dialogue’s sake with North Korea would be meaningless, and that China’s role in exerting pressure on the North was important.
The North’s KCNA news agency reported leader Kim Jong Un supervised Monday’s test of a missile equipped with a new precision guidance system and an improved pre-launch automated sequence and a new mobile launch vehicle.
Kim said North Korea would develop more powerful weapons in multiple phases in accordance with its timetable to defend North Korea against the United States.
“He expressed the conviction that it would make a greater leap forward in this spirit to send a bigger ‘gift package’ to the Yankees” in retaliation for American military provocation, KCNA quoted Kim as saying.
(Additional reporting by Jack Kim, Hyunjoo Jin, Christine Kim and Suyeong Lee in Seoul and Kiyoshi Takenaka in Tokyo; Writing by Bill Tarrant; Editing by Nick Macfie)
By Michelle Nichols | UNITED NATIONS
The United States and China are negotiating when they should push for further United Nations Security Council action on North Korea and could reach a decision this week, U.S. Ambassador to the United Nations Nikki Haley said on Tuesday.
Haley characterized the discussions between Washington and Beijing as “at what point … do we say ‘OK, now it’s time for a resolution?'”
U.N. diplomats, speaking on condition of anonymity, have said it appeared China was still only prepared to act if North Korea conducted a long-range missile launch or a nuclear test and that Beijing does not view the dozens of ballistic missile launches in the past year as warranting further U.N. sanctions.
“(The Chinese) have the lay of the land and so we’re going to keep the pressure on China, but we’re going to continue to work with them in any way that they think is best, and I think that we’ll decide this week on what that looks like,” Haley told reporters.
The Security Council first imposed sanctions on Pyongyang in 2006 over its ballistic missile and nuclear programs and has ratcheted up the measures in response to five nuclear tests and two long-range missile launches. North Korea is threatening a sixth nuclear test.
U.S. Secretary of State Rex Tillerson told the U.N. Security Council on April 28 that the 15-member body needed to act before North Korea does. Just hours after the meeting, chaired by Tillerson, Pyongyang launched yet another ballistic missile.
Within days the United States proposed to China that the Security Council strengthen sanctions on North Korea over its repeated ballistic missile launches. Traditionally, the United States and China have negotiated new sanctions before involving the other 13 council members.
Since then Pyongyang has launched several more ballistic missiles, including a short-range ballistic missile on Monday that landed in the sea off its east coast.
“Nothing is changing North Korea’s actions,” said Haley, adding that it was time to say: “OK, what are we going to do if this is going to happen every other day? How should we respond in a way that we actually stop these things or slow it down?”
Haley said the United States believes “China is doing back-channel networking with North Korea in a way that’s getting them to try and stop the nuclear testing. So we believe that they are being productive.”
NEW YORK/LONDON, May 30 – Gold prices eased after hitting a one month high on Tuesday as economic data from the United States showed increased signs that the Federal Reserve would raise interest rates next month.
U.S. consumer spending recorded its biggest increase in four months in April and monthly inflation rebounded, pointing to firming domestic demand that could allow the Federal Reserve to raise interest rates next month.
The metal, often seen as an alternative investment during times of political and financial uncertainty, earlier in the session touched a one-month high as it benefited from a risk-averse mood in global markets along with the Japanese yen and U.S. Treasuries.
Spot gold touched a one-month high of $1,270.47 before pulling back 0.3 percent to $1,262.76 per ounce by 2:15 p.m. EDT (1815 GMT). U.S. gold futures slipped to end the session 0.5 percent lower at $1,262.1 an ounce.
“While U.S. inflation data released May 30 (broadly in line with expectations) and the U.S. employment report is due on 2 June are where the market will be looking for guidance on the Fed’s monetary policy, price risks in both directions could arise from the UK election (June 8) and the FOMC meeting (June 14),” Standard Chartered analysts said in a note.
“Our economists continue to expect a 25 (basis points) Federal Reserve hike in June while the market is pricing in an 84 percent probability of such a hike.”
Gold is highly sensitive to higher rates, which increase the opportunity cost of holding non-yielding bullion while boosting the dollar, in which it is priced.
Investors have been concerned about next week’s election in Britain, as well as the prospect of early elections in Italy and worries over Greek debt, which analysts said supported gold and dented stocks.
A poll in Britain on Tuesday showed Prime Minister Theresa May’s lead over the opposition Labour Party dropping to six percentage points ahead of the election on June 8.
“Ideally to see a rally in the (stock) markets the UK would want to see Theresa May win by an overwhelming majority which seems to be less likely to happen taking into account the latest polls,” Natixis precious metals analyst Bernard Dahdah said.
“If May wins with her current lead it will be slightly negative for her negotiation hand (in Brexit talks) and … positive for gold.”
In Italy, former prime minister Matteo Renzi suggested on Sunday that the country’s next election be held at the same time as Germany’s. Germany will vote on Sept. 24, while elections are due in Italy by May 2018.
Euro zone finance ministers’ failure to agree on Greek debt relief with the International Monetary Fund last week also added to risk aversion.
Forex.com market analyst Fawad Razaqzada said the focus for bullion this week was U.S. non-farm payrolls due on Friday.
“I expect the dollar to continue to strengthen this weekuntil Friday’s jobs data release, therefore I think gold is going to go down from here,” Razaqzada said.
Among other precious metals, silver marked its highest level since April 27 at $17.47 an ounce. It was last down 0.12 percent at $17.35.
Palladium was up 0.91 percent at $804.25 after hitting the highest since May 16 at $807.70 an ounce. Platinum was down 1.24 percent at $940.70 an ounce.
U.S. President Donald Trump attacked the news media and dismissed leaks from the White House as “fake news” on Sunday, following reports his son-in-law tried to set up a secret channel of communications with Moscow before Trump took office.
Shortly after Trump’s remarks on Twitter, Homeland Security Secretary John Kelly made the rounds of Sunday television news shows to praise any so-called back channel communications, especially with Russia, as “a good thing.”
The Republican president returned to the White House after a nine-day trip to the Middle East and Europe that ended on Saturday to face more questions about alleged communications between Jared Kushner and Russia’s ambassador to Washington.
“It is my opinion that many of the leaks coming out of the White House are fabricated lies made up by the #FakeNews media,” Trump wrote in a series of Twitter posts on Sunday.
The White House faces mounting questions about potential ties between Russia and Trump’s presidential campaign, which are also the subject of criminal and congressional investigations. Trump officials were preparing to establish a “war room” to address an issue that has begun to dominate his young presidency.
Aides said Trump was expected to meet with lawyers as early as Sunday, the New York Times reported.
Two Republican U.S. senators played down the Kushner reports on Sunday, while the former director of national intelligence, James Clapper, took a darker view of such contacts with representatives of Russian President Vladimir Putin.
“My dashboard warning light was clearly on and I think that was the case with all of us in the intelligence community – very concerned about the nature of these approaches to the Russians,” Clapper told NBC’s “Meet The Press.”
Kushner, who is married to Trump’s daughter Ivanka, had contacts with Moscow in December about opening a secret back channel of communications, according to news reports published while Trump was away on his trip.
The 36-year-old Kushner, a real estate developer with no previous government experience, had at least three previously undisclosed contacts with the Russian ambassador to the United States during and after the 2016 presidential campaign, seven current and former U.S. officials told Reuters.
“Whenever you see the words ‘sources say’ in the fake news media, and they don’t mention names,” Trump wrote, “it is very possible that those sources don’t exist but are made up by fake news writers. #FakeNews is the enemy!”
Contacts between Trump associates and Russian officials during the campaign coincided with what U.S. intelligence agencies concluded was a Kremlin effort through computer hacking, fake news and propaganda to boost Trump’s chances of winning the White House.
‘A GOOD THING’
White House officials defended the concept of secret communications channels without commenting specifically on the Kushner case. National security adviser H.R. McMaster told reporters on Saturday that so-called back-channeling was not unusual.
Kelly, the homeland security secretary, carried the same message on Sunday.
“It’s both normal, in my opinion, and acceptable,” he said on ABC’s “This Week” program. “Any way that you can communicate with people, particularly organizations that are maybe not particularly friendly to us, is a good thing.”
Kelly told “Fox News Sunday” there was nothing wrong with the Trump transition team trying to build relationships with the Russians as they prepared to take over the White House.
U.S. Representative Adam Schiff, the top Democrat on the House Intelligence Committee, said such secret channels may be used in situations including peace talks with the Taliban in Afghanistan or for the release of American hostages.
“But for people associated with the campaign after that campaign has ended and where the Russians during that campaign were helping you, to try to establish a back channel and hide it from your own government, that’s a serious allegation,” he said.
Schiff was particularly concerned about a Washington Post report that the back channel would have been conducted at a Russian diplomatic facility to avoid monitoring in U.S. communications systems. “You have to ask, well, who are they hiding the conversation from?” he said on ABC.
Schiff said he expected Kushner, who serves as an unpaid adviser to Trump, to appear before his committee and suggested his security clearance be reviewed.
Kushner initially had come to the attention of FBI investigators last year as they began scrutinizing former national security adviser Michael Flynn’s connections with Russian officials, the two sources told Reuters.
Republican U.S. Senator Lindsey Graham told CNN he doubted the Kushner reports were accurate. Senator Bob Corker, chairman of the Foreign Relations Committee, noted that Kushner has been willing to answer questions. “They reached out to us yesterday to make sure that we knew that was the case and I’m sure he’s willing to do so,” Corker said on NBC’s “Meet the Press.”
Though he had not seen evidence of collusion when he stepped down on Jan. 20, Clapper said all the signs made an FBI investigation not only appropriate but necessary.
“Russia, at least for my money, is our primary adversary,” he told NBC. “They are not our friends. They are in to do us in.”
(Reporting by Doina Chiacu and Toni Clarke; editing by David Clarke and Nick Zieminski)
(Kitco News) -Gold’s resiliency in the face of a potential rate hike in just over three weeks is surprising some market participants; however, others note that gold is paying more attention to ongoing geopolitical strife.
The yellow metal is preparing to end its third week of consecutive gains as prices push to their highest level in four weeks. June Comex gold futures last traded at $1,266.90 an ounce, up 1% from the previous Friday.
Silver is also ending its third week of straight gains at a four-week high, but outperforming gold. July Comex silver futures last traded at $17.30 an ounce, up 3% from last week.
While the upcoming shortened trading week will see the release of key U.S. economic data, analysts say that gold’s technical momentum and safe-haven interest will dominate market sentiment, next week.
“There is plenty for investors to worry about right now and I certainly wouldn’t want to be short on gold in this environment, said Barry Potekin, vice president of managed futures accounts at RMB Group. “The train might be moving smoothly now, but you never know what is going to happen down the tracks so you don’t want to give up your seat.”
Potekin said that with so much uncertainty around the globe, it is difficult to focus on a 25-basis point hike. Considering the yellow metal’s renewed momentum, he thinks $1,300 could be in the card in the near-term.
“If we get a move back above $1,300 then we are going to $1,400,” he said.
Jasper Lawler, market analyst at London Capital Group, agreed that other factors are outweighing interest rate hikes. Not only will ongoing turmoil in U.S. politics help gold prices in the near-term, but there is growing uncertainty surrounding elections in the United Kingdom next month.
“This ongoing risks surrounding the leadership in two major countries will continue to be good for gold,” he said. “The geopolitical uncertainty has pushed gold above $1,260, a key pivot point, and if we close above this level today then I think we could see higher prices next week.”
Interest Rate Hike Is Baked Into The Cake
One of the reasons why the impending interest rate move is having little impact on gold and currency markets is because it is already seen as a sure thing, said Nick Exarhos, senior economist at CIBC World Markets.
He added that it is difficult to see a new catalyst on the horizon that will push the U.S. dollar higher, removing a major headwind for gold.
CME 30-Day Fed Fund futures are currently pricing in an 87% chance of a 25-basis point hike in June, this is the highest expectations have been in more than a month.
Not only is the U.S. dollar struggling to make new gains, but a stronger euro, is exacerbating, U.S. dollar weakness, said Lawler.
While June is seen as a sure thing, there is still uncertainty surrounding a third rate hike by the end of the year. Markets are only pricing in a 48% chance of a rate hike by December. Traditionally, the Fed does not raise interest rates if expectations are below 50%.
Level To Watch
Not only has gold broken above a key resistance point at $1,260 but the market has made an important technical pattern as the 50-day moving average moved above the 200-day moving average. This is referred to as a Golden Cross and highlights bullish short-term momentum.
Lawler said that the next major resistance level he is watching next week will be $1,280 an ounce. He added if this level breaks then there is a good chance gold could hit a new high for the year at $1,300.
Chris Beauchamp, market analyst at IG, is also watching $1,280 an ounce as he maintains a bullish outlook near-term.
“Dips to the $1250 area this week continue to bring out the buyers, so until this changes we remain guardedly bullish,” he said.
Analysts at iiTrader said in a report that they see major resistance between $1,290 an ounce and $1,294.10 an ounce.
“Only a close back below 1252.6 will signal a failure,” the firm said.
The Final Say
While geopolitical turmoil remains the driving force behind gold, investors will still want to pay attention to economic data as they could add some volatility in the markets.
The main feature of the week will be Friday’s nonfarm payrolls report.
After the Memorial Day long weekend, markets will receive important inflation data with the release of the Personal Consumption Expenditure Index,personal income and spending data.
Mid-week, markets will receive manufacturing data for May and private-sector employment numbers.
(Kitco News) – The so-called summer doldrums are nearing and the gold market historically sees quiet trading, but according to one analyst, it could be different this year.
“[T]he average performance of the USD gold price in the months of June and July over the past 5 and 10 years, imply that slower bullion demand from jewellers translates into a dull market,” wrote Tom Kendal, ICBC Standard Bank’s head of precious metals strategy, in a report Friday.
“However, averages can hide significant year-to-year variations. The range of performance for gold in June over the past 5 years ranges from positive 8.33% last year to negative 11.04% in 2013.”
In the report, Kendall highlighted both the bullish and bearish case for gold over the summer and argued that the metal may see some more upside.
“On balance, given the recent unwind in Comex length, the fact that we think the market may be mispricing the likelihood of the Fed staying on hold, and the trend in the dollar, we prefer to err on the bullish side,” he said.
Gold managed to rally on Friday, with June futures settling the day near 4-week highs at $1,268.10 an ounce.
However, there are bearish factors for gold still lingering in the marketplace like the imminent announcement of the Indian goods and services tax (GST) rate that will apply to gold jewelry, he noted.
“If government takes a more aggressive stance (which would be in keeping with the policy of bearing down on the current account deficit) then the gold price could take a hit.”
He added that positive equity markets, slumping oil and the potential Federal Reserve rate hike in June could also weigh on the yellow metal.
On the flip side, however, Kendall noted that the weaker U.S. dollar is helping to support the gold market. “[T]he trend from January is still firmly downwards,” he said.
As for the Fed rate hike, Kendall said that since the market is pricing in such a high probability of tightening in June, a surprise could help push gold higher.
“Last but not least, we have the US debt ceiling approaching, notwithstanding the current extraordinary funding measures. With the President’s support from within his own party looking far less solid that it was a month ago, and plenty of porkbarrels to be kept full, the horse-trading could get ugly (apologies for mixing the farmyard metaphors),” he added.
With a solid case for both sides, Kendall says the opposing forces could “net off” gold prices, leaving the metal adrift for the summer months.
“But we would rather not contemplate that depressing scenario.”