Gold jumped to its highest since November on Tuesday, extending the prior day’s rally above $1,300 per ounce as investors bought bullion as insurance against falling prices of other assets after North Korea tested a ballistic missile over Japan.

U.S. President Donald Trump warned that all options are on the table for the United States to respond to North Korea’s new show of force.

“Funds and traders are filling their boots with gold at the moment and so far that’s justified,” said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen.

“Stocks are coming off hard, the dollar has weakened and now also against the yen, which has been the missing link, while bond yields are also taking a beating.”

Geopolitical risks can boost demand for safe-haven assets such as gold, which is considered a store of value during volatility in other markets.

Spot gold XAU= was up 0.4 percent at $1,314.52 an ounce by 1:54 p.m. EDT (1754 GMT), after touching $1,325.9399, its highest since Nov. 9.

U.S. gold futures GCcv1 for December delivery settled up 0.3 percent at $1,318.90.

“Investors are seeking safe shore and are unlikely to bail too quickly on the yellow metal now, though profit taking will certainly test the downside,” said Miguel Perez-Santalla, vice president of Heraeus Metal Management in New York.

Spot gold climbed by 1.4 percent on Monday, breaking through key resistance at $1,300 an ounce after comments by the head of the European Central Bank boosted the euro and pressured the dollar.

Source: Nasdaq