(Kitco News) - Overnight and this morning risk sentiment has been slightly nervy as China has been threatening action if Speaker of the United States House of Representatives Nancy Pelosi visits China. Taiwan is bracing itself for some Chinese retaliation if Pelosi sets foot in the nation this afternoon as expected. Pelosi's visit was not sanctioned by the White House and China warned that the U.S. would pay a price if the third highest ranking U.S. official made the bold move to visit.
Foreign ministry spokeswoman Hua Chunying said "The US side will bear the responsibility and pay the price for undermining China's sovereign security interests,"
The Chinese military has reportedly sent some warplanes over to patrol the unofficial border (Taiwan strait) in recent days. The Taiwan military said it had a full grasp of what has been going on near the island.
Hua Chunying did add later in the day that China has been in communication with the United States over the visit so the dialogue continues.
Gold has moved higher overnight and has pared some of those gains so far this morning. Traders of the yellow metal will be watching the situation closely as it is now a key risk event. The reason we can confirm gold has been moving as a risk hedge in this situation is due to the fact that silver and stocks pulled back overnight as gold moved higher. In more recent times, with the stronger USD, stocks, gold, and silver have been moving with each other but last night there was a clear divergence.
Gold is currently trading 0.21% higher at $1775.10/oz. If it closes higher today at the close that will be a five-day winning streak for the precious metal.
