Gold surges to 9-1/2-month peak af­ter North Korea missile test

Business World - - WORLD MARKETS -

NEW YORK/LON­DON — 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.

US 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 was up 0.40% at $1,314.52 an ounce by 1:54 p.m. EDT ( 1754 GMT), af­ter touch­ing $1,325.9399, its high­est since Nov. 9.

US gold fu­tures for De­cem­ber de­liv­ery set­tled up 0.30% 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.

Spot gold climbed by 1.40% 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.

Gold ex­tended its rally on Tues­day as global eq­uity prices slipped, with the MSCI world in­dex at a one-week low as in­vestors flocked to safe-haven as­sets.

Hold­ings of SPDR Gold Trust, the world’s largest gold- backed ex­change-traded fund, rose 1.10% to 814.36 tons on Mon­day. Other pre­cious met­als ben­e­fited, with pal­la­dium up 1.10% at $944, af­ter ris­ing to a 16-and-a-half-year high at $949.10.

Among other pre­cious met­als, plat­inum gained 1.30% to $1,000 af­ter mark­ing its high­est since March 2 at $ 1,006.30. Spot sil­ver was up 0.20% at $17.45 af­ter touch­ing $ 17.66, a two- and- ahalf-month high. —

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