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In the last few weeks, there has been a lot of tension in the Pacific as the Trump Administration decided to mobilise military forces near to the Korean Peninsula, a region that has always been hot.

It was clear from the beginning that Trump was going to have a very different approach regarding the US relations with the North Korean dictator, Kim Jong-un. The dictator’s current position towards the US is more aggressive than ever before, especially since the arrival of Donald Trump to the White House.

Both leaders are ready to start a nuclear war, something that most people seem to be already digesting in their imagination. Before his victory, Trump talked many times about the different declared enemies trying to destroy the United States: from ISIS to Iran. Among them, North Korea is one of the favourites.

After the nuclear tests carried out by North Korea, it was clear for Trump that the time was right to act. He moved the pieces and created a total mayhem even without launching a single missile.

We’ll talk about gold’s role here. But now, let’s get the political details.

Superpowers Playing Around

China and the US have been playing a complicated game since the Trump’s presidential campaign. The American leader decided to engage a trade conflict with the Asian giant, something that does no good to the parties involved. That’s why Xi Jinping, the Chinese president, has been giving Trump a special treatment.

As expected, China’s posture towards Trump Administration’s threats has been fierce and serious, without any space for weaknesses. But after North Korea decided to execute very provocative nuclear tests, threatening South Korea and Japan, two key allies for the US, Trump was forced to move.

Kim Jong-un’s belligerent behavior also forced Xi Jinping to choose a side, telling the North Korean dictator to cool down his nuclear desires and act accordingly to achieve a diplomatic solution. Of course, Jong-un didn’t care.

An Uncertain Panorama

If tensions continue and any of the powers involved decide to act in a drastic fashion, a nuclear war could begin. This would represent massive chaos all over the world, with the biggest countries receiving important blows in terms of military, trade, and population losses.

Japan and South Korea, the nearest enemies that North Korea has on sight, would suffer and with them, the entire system worldwide, as many of their enterprises that lead the global economy are in those countries. Two good examples of this are Toyota and Samsung.

What Could Happen to Gold?

Gold is the ultimate safe-haven for situations like these. The whole situation boosted gold prices in recent weeks, representing a clear signal of how anxious investors are getting. A nuclear war, besides menacing the humanity in the mid-term, would crush the economy immediately.

Major financial hubs like Tokyo, Seoul, Beijing, or even San Francisco could receive a relevant, direct damage. This would crush major currencies’ values and put the entire system upside-down. So, if an investor wants to protect its assets from the chaos, gold may be the best alternative.

It would be smart to buy gold bullion now.

Gold News Australia