Fears over the North Korea missile test abated on Monday thanks to the statement of the President of South Korea, who called to subdue the nuclear ambitions of its neighbor peacefully. Influential American officials also rebuffed concerns about the inevitability of war with North Korea.
Defensive assets as well as government obligations were the main beneficiaries of this situation rising in price but weekend comments helped to alleviate concerns and resulted in a retreat of safe heavens and upturn of stock markets and dollar. Gold fell but remains on its track to $1,300 as general bullish trend remains unobstructed.
The concern that North Korea is close to the creation of missiles capable of delivering nuclear weapons to the US territory has led to increased hostility in recent months.
President Donald Trump warned that American weapons “ready for battle” in the case of the precipitate actions of North Korea which threatened to launch missiles last week that fly over Japanese territory and fall near the US-owned island of Guam.
South Korea seeks peaceful resolution
“There should no longer be the war on the Korean peninsula in spite of all the ups and downs, the situation with the nuclear ambitions of North Korea must be solved peacefully.” – said the president of the South Korean Moon Jae-in on the planned meeting with senior advisers and aides. “I am sure that the US will react calmly and responsibly to the situation, in the same way as we do,” he said.
American officials, including National Security Adviser Herbert McMaster appreciated Trump’s rugged position on North Korea missile test. But he dismissed the assumption that the verbal skirmish would lead to the conflict.
“I think we are no closer to the war than we were a week ago, but we are closer to the war than ten years ago,” said McMaster on the program “This Week” on ABC News.
CIA Director Mike Pompeo said that North Korean leader Kim Jong-un can again conduct missile tests, but to say that countries are on the verge of war means exaggerating the risk.
“I did not see any intelligence that would show that today we are a step away from this,” he said on Fox News Sunday.
World stock markets rose sharply on Monday, as softer rhetoric encouraged investors
However, North Korea reiterated its threat: Korean Central News Agency (KCNA) reported that “no power can not prevent war, if due to some accidental incident that occurred unintentionally, sparks will fly.” “The Second Korean War will inevitably flow into the nuclear war,” KTAC reported on Monday.
South Korea’s Deputy Defense Minister Soo Chu Sook agreed that North Korea Missile test may be again launched, including nuclear tests, but did not see a significant risk of a real military conflict with Pyongyang.
He once again questioned the DPRK’s statements about its nuclear potential.
The United States and South Korea technically remain at war with the DPRK since the Korean conflict of 1950-1953, which culminated in the signing of an armistice rather than a peace treaty. Tension in the region heightened after the DPRK, which twice conducted the launches of nuclear missiles last year, conducted tests of intercontinental ballistic missiles in July. Trump called on China, dominant ally and trading partner of the DPRK, to take additional measures to deter threats of its neighbor.
Stay tuned with our news and share your thoughts on Korean conflict in the comment section below.
Also take a moment to read our insight on oil