The price of silver is expected to rise as geopolitical tensions revolving around North Korea and Syria escalate. Based on technical analysis of the precious metal, prices could appreciate further and reach $19 an ounce. And with fundamentals showing a bias for safe haven investments in the current geopolitical climate, the resistance level of $18.47 looks likely to be breached.
Silver prices could rise even more if the geopolitical tensions do not subside in the medium and long-term. So far all indications are that they will escalate. Even as the United States sent a strike group off the waters of the Korean Peninsula to tame North Korea and stop further missile tests, the secretive state does not appear to be caving in.
Sixth nuclear test
Reports indicate that North Korea will be conducting the sixth nuclear test on Saturday. This will coincide with celebrations to mark 105 years since the founder of the state, Kim II Sung, was born. Sung is the grandfather of the current leader, Kim Jong Un. 38 North, a think tank that monitors activities in North Korea has said that satellite images which were taken on Wednesday had showed that activity in a nuclear test site located in Punggye-ri had continued. This was an indication that the country was possibly ready to undertake another nuclear weapons test.
Besides sending an aircraft carrier to the Korean peninsula, U.S. President Donald Trump is said to be considering stronger sanctions on North Korea. This could include cargo ship interception, punitive measures against Chinese banks that conduct business with Pyongyang, a ban on North Korea’s airline and an oil embargo. North Korea is already reeling from increased U.N. sanctions. Issuance of coal importation permits from North Korea is already under suspension in China.
Russia vetoes UN resolution
As the world waits with baited breath on what will happen with North Korea in the coming days, the Syrian situation is not getting any better. A UN resolution aimed at condemning the alleged use of poisonous gas in northern Syria was vetoed Wednesday by Russia, inviting a backlash from Western powers. Reports indicate that after the veto, the UK ambassador to the UN, Matthew Rycroft turned to the Russian ambassador and posed: “How could anyone look at the faces of lifeless children and choose to veto a resolution condemning those deaths?”
Nikki Haley, the U.S. ambassador to the UN, said that with the veto Russia had demonstrated its disdain for accountability and peace in Syria. This came even as the relations between the U.S. and Russia reached new lows following the launching of missiles on a Syrian airfield by the U.S.