Your Expert
Precious Metal Service

01769 618618

9am - 5pm, Monday - Friday

Umberleigh, Devon, EX37 9TB

Gold hits 1-week high amid renewed North Korea fears

Monday, October 9, 2017

Gold prices climbed to their strongest level in more than a week on Monday as renewed concerns over North Korea's nuclear ambitions stoked safe-haven demand for the precious metal and weighed on the dollar.

Spot gold was up 0.4 percent at $1,279.99 an ounce by 0705 GMT, after earlier touching $1,284.97, its highest level since Sept. 29.    

U.S. gold futures for December delivery gained 0.6 percent to $1,282.40 per ounce.    

The dollar held steady against the yen, having retreated from 12-week highs set last week, due to a renewed focus on geopolitical risks amid concerns that North Korea may be preparing another missile test.                           

"This is really arbitrage-driven, and the Chinese having come back and trading the difference between the arbitrage," a Hong Kong-based trader said, adding that developments over the weekend concerning North Korea provided support for gold.    

Chinese markets reopened on Monday after a week-long National Day holiday.    

Geopolitical risks can boost demand for safe-haven assets such as gold and the Japanese yen.                   

North Korea's leader Kim Jong Un said his nuclear weapons were a "powerful deterrent" that guaranteed its sovereignty, hours after U.S. President Donald Trump said "only one thing will work" in dealing with the isolated country.                  

Gold might face initial resistance at around $1,285, the trader said.    

But Reuters technical analyst Wang Tao said he sees the next resistance level for the precious metal at $1,299 after it breached $1,281, Reuters technicals analyst Wang Tao said.                     

U.S. employment fell in September for the first time in seven years, data on Friday showed, due to impacts from Hurricanes Harvey and Irma.                  

Chocking up employment losses last month to the temporary hit of a severe hurricane season, and reiterating expectations that inflation will firm, Federal Reserve policymakers on Friday signalled they continue to see gradual U.S. interest-rate hikes ahead.                  

Higher interest rates tend to boost the dollar, putting pressure on the greenback-denominated bullion.        

Speculators reduced their net long positions in COMEX gold and silver contracts for the third straight week, in the week to Oct. 3.             

In other metals, silver was last up 0.7 percent at $16.90 an ounce, having touched a nearly two-week high of $16.99 earlier.    

Platinum and palladium were both up 0.5 percent, at $917.50 and $924.65 an ounce, respectively.

Source: Reuters UK

Leave your comment