What to make of this week’s unprecedented meeting between the US President and the leader of North Korea?

 

Firstly, it is sobering to realise that this is sadly not unprecedented. We could change the names of the leaders but the optics would remain surprisingly similar. In fact, it is the optics – how things look – which remind our gut instinct of the familiarity of this set up:

“If, like me, you more commonly associate optics with those spirits dispensers behind the bar at the local pub, then you are not up to speed with the jargon of modern diplomacy. Optics was the mot du jour yesterday after Donald Trump’s meeting with Kim Jong-un.

 

 

In the world of international summitry, optics are what something looks like, and in Singapore everyone agreed the optics were great, even if questions remain over the substance of the agreement to denuclearise the Korean peninsula,” (The Telegraph).

Kitco sum up the coverage perfectly: “Depending on your choice of network you can make your own judgment on the summit in Singapore between Trump and Kim. No matter what your slant, at a minimum the meeting should diffuse short-term geopolitical risks between the two countries.”

This is surely true and will therefore affect the price of Gold, which favours international uncertainty, rather than diplomacy.

In keeping with Kitco’s bi-partisan approach, after quoting from The Telegraph, let’s also quote from The Guardian which, this morning, covers the news as it is being reported in North Korea. This is a highly useful insight into the psyche of what it must be like to exist and think as a North Korean:

“Trump, KCNA said, “appreciated that an atmosphere of peace and stability was created on the Korean peninsula and in the region, although distressed with the extreme danger of armed clash only a few months ago, thanks to the proactive peace-loving measures taken by the respected Supreme Leader from the outset of this year”. It also celebrated what some have described as Kim’s rapid transformation from reviled dictator to statesman following the positive reception he received in Singapore. “Singapore, the country of the epoch-making meeting much awaited by the whole world, was awash with thousands of domestic and foreign journalists and a large crowd of masses to see this day’s moment which will remain long in history,” it said.

 

President Trump in Singapore Summit

 

In addition, if you’re interested, take a look at the 4 minute video showcasing the summit, produced by The White House for Kim Jong-Un (displayed below). This will appear “bizarre” to our Western minds, of course. Note the grainy clips, lack of HD and modern filter tones, long out-dated transitions between frames, lack of camera movement. All of these would be trademarks of a modern Western media. Such fingerprints would appear foreign to the highly dogmatized neocortex of an individual raised under a communist dictatorship. However, note the psychological terms applied throughout and attributed to Kim, thus handing him the position of a messiah in a “Western produced” piece to play to his masses. Yet, ego is central – note the use of the word “featuring” Trump and Kim, as if this did take its glory from a Hollywood-meets-North Korean international venture, with the phrase “the world is watching.” This is actually a delightful exercise in fairly transparent psychology and is surprising to our Western minds that a national leader would fall for it. Or maybe he didn’t and thought it incredibly patronising. We’ll never know, but you can watch it here for yourself and see what you think:

 

 

But, no doubt, a stage is being set. It may appear North Korea is thousands of miles away from the Middle East but on paper it is – tragically – not. The Iran Nuclear deal is based on the North Korean nuclear deal. Where the North Korean deal has – until recently failed – is precisely how the Israeli’s and the rest of the Western world fear the Iranian deal will fail. This isn’t hearsay. Two years ago, I sat in a speaking conference with a top security advisor to the Israeli Prime Minister. I’m no one important, I just happened to be in the right place at the right time to learn from a cultural viewpoint different to both the West and the East. He was clear that the Iranian deal is based on the North Korea deal, which is itself several years ahead in its fissures and breaking points than the Iranian deal, now in its infancy. All of these perceptions fascinate me – Gold and financial markets are after all driven by the actions and reactions of us humans.

But it is fair to say there is so much more here that is going on that what meets the eye. I’m positive many of you got the same feeling as you watched the coverage throughout yesterday. The question my brain is asking me and I’m sure many of you, who also watch the news with Gold and Silver in mind, is why now? What does Kim Jong-Un gain out of this? Being hailed the saviour of the Korean peninsula is not enough, because only a few short months ago, he was being painted as the most powerful ruler in this region, but through defiance and nuclear testing. Why switch and why now? Some have argued that there’s a weak spot behind the scenes that brought him to the table. I wouldn’t be surprised if it is to keep his position and his life, from factions within his own military echelons.

China, Russia, North Korea are the apex of the opposition to the US and the E.U. when it comes to the metaphorical frontline, drawn not in the Far-East but unexpectedly from 2011 onward in Syria. I say unexpectedly, because it is a slightly oblique place to create the new cold war? The Muslim world splits into two camps around Shi’a or Sunni and falls into place behind each side, all incredibly uncomfortable bed fellows, with the international oil markets as the currency in this dysfunctional dance. And Physical Gold is the insurance policy. He who has the biggest insurance policy wins, and in fact, only wins if there is a disaster of some kind. 

 

One ounce Gold Kangaroo Coins were produced by The Perth Mint in Australia.

 

As we’ve seen, predictably, the price of Gold rose when the summit was “cancelled” and fell when the summit appears a success. Silver rose yesterday, being an industrial metal as well as a safe haven. So, Silver’s trading side has risen to reflect the production optimism that a bridging of East and West brings. I’m sure like you I will be fascinated to see where we are in a year or two. Will it still stand or will it be held as the very reason not to trust one’s “enemies”? Only time will tell. And this news is developing as we speak.

As mentioned, the optics were powerful and immediate yesterday. But the substance of the “deal” is only just dripping through into the media and we may not know the entirety of the terms for some time. Just out this morning is the fact that the US will halt joint military exercises in South Korea. Whether this will stabilise or weaken the Korean Peninsula will need to be tested. Be prepared to watch developments closely to estimate the direction of the Gold price.

To discuss how to steadily increase your holdings in Physical Gold and Silver, call one of the Bleyer team now on 01769 618618 or browse bleyerbullion.co.uk or email sales@bleyer.co.uk.