Gold prices jump to near 10-month highs

NEW YORK: Gold prices hit their highest in nearly 10 months yesterday after North Korea’s latest and most powerful nuclear test drove investors towards safe-haven assets.

Spot gold rose 0.7% to US$1,333.28 (RM5,693.65) per ounce by 0329 GMT (11.29am Malaysia), earlier touching its best since Nov. 9 at US$1,336.79.

US gold futures for December delivery were up 0.6% at US$1,338.60.

“What dominates the market is really the geopolitical tensions right now, either in North Korea or in the United States,” said Mark To, head of research at Hong Kong’s Wing Fung Financial Group.

North Korea on Sunday conducted its sixth nuclear test, of what it said was an advanced hydrogen bomb, prompting the threat of a “massive” military response from the United States if it or its allies were threatened.

The Japanese yen and sovereign bonds also climbed yesterday as North Korea’s nuclear test provoked a knee-jerk shift to safe havens, though equity losses were modest.

Adding to tensions, Russia on Sunday denounced the closure of three Russian diplomatic facilities in the United States as a “blatantly hostile act” that violated international law and demanded Washington reverse the order.

“The support level (for gold) at US$1,300 should be rather robust at this moment and because of the need for riskaversion US$1,375 should be possible as a price range,” To said.

“Another plus for gold is that we don’t see an immediate rate hike and the shrinkage of the Federal Reserve’s balance sheet.” – Reuters