Gold up as US-North Korea tensions boost safe-haven appetite

NEW YORK/LONDON — Gold edged up from the previous day’s four-week low on Friday as the dollar fell and investors sought a safe haven from geopolitical uncertainty caused by rising tensions between North Korea and the United States.

Bullion is used as a refuge in times of political or economic turbulence, while assets considered risky such as stocks are dumped.

North Korea said on Friday it might test a hydrogen bomb in the Pacific Ocean after US President Donald Trump threatened to destroy the country, with leader Kim Jong Un promising to make a “mentally deranged” Trump pay dearly for his threats.

The Japanese yen and Swiss franc gained on the possibility of North Korea conducting another nuclear test.

US stocks and the greenback were down.

Spot gold was up 0.36% at $1,295.71 per ounce by 2:29 p.m. EDT (1829 GMT), having hit a four-week low of $1,287.61 on Thursday. Prices hovered near support at the 50-day moving average. Even with the day’s gains, spot gold was poised to finish the week down 1.50%, the largest such decline since early July.

“Gold disappointed today with just a perfunctory bounce as yields and the dollar receded from highs, but largely neglected North Korean threats of a hydrogen bomb test over the Pacific Ocean,” said Tai Wong, head of base and precious metals trading at BMO Capital Markets in New York.

“With the speculative market quite long and bullion trading just above key technical support levels fresh buyers were scant.”

The Fed earlier this week signaled it was still on track to raise interest rates by yearend. Tighter monetary policy raises the opportunity cost of holding non-yielding bullion. The dollar had risen to a two-month peak following the Fed’s comments.

US gold futures for December delivery settled up $2.70, or 0.21%, at $1,297.50 per ounce.

Gold may end its current weak bounce around a resistance at $1,299 per ounce and then fall towards support at $1,281, said Reuters technicals analyst Wang Tao.

Among other precious metals, silver was unchanged at $16.95 an ounce, platinum fell 0.86% to $ 927.50, while palladium was up 1.08% at $ 920.33. —