Gold rebounds above two-month low on worries about North Korea

NEW YORK/LONDON — Gold bounced up from a two-month low on Friday, on concerns stoked by a Russian report that North Korea is preparing to test a longrange missile and on support from the US dollar’s shift into negative territory.

“The Russian report of a looming North Korean missile test that could reach the west coast of the United States combined with a weakening dollar goosed gold from two- month lows,” said Tai Wong, head of base and precious metals trading at BMO Capital Markets in New York.

“Gold has slumped seven percent over the past month, which is making speculative shorts wary at current levels so we may see $1,300 before $1,250.”

Spot gold rose 0.40% at $1,273.06 an ounce (/oz) by 2:40 p. m. EDT ( 1840 GMT). US December gold futures settled up 0.10% at $1,274.90/oz.

The dollar index fell from a two-and-a-half-month high.

“The dollar’s initial gains evaporated as market participants made a more sober assessment of the jobs report and realized that the sharp rise in average hourly earnings may have been driven by a sizeable drop in low-paid and hurricanehit jobs rather than an actual rise in earnings,” said Fawad Razaqzada, technical analyst for Forex.com.

“As the dollar fell, buck- denominated precious metals went up in value.”

Earlier, bullion fell to a twomonth low at $1,260.16 an ounce on an upbeat reading of the US unemployment rate and wage growth last month that supported expectations for a further US interest rate hike in December. This pushed the dollar and Treasury yields higher.

Gold prices have fallen 0.50% this week and are facing their fourth straight week of decline, the metal’s longest run of weekly losses this year.

Holdings of the world’s largest gold-backed exchange-traded fund, SPDR Gold Shares, have fallen 13.60 tons so far this week, their first weekly outflow in nine weeks and the largest since late July.

Demand for physical gold in India improved slightly this week because of a correction in local prices, but restrictions on the industry and increased smuggling took the sheen off the bullion market.

Silver was up 1.10% at $16.75 an ounce, after falling to a two-month low at $16.30. Platinum was down 0.03% at $910.75 an ounce, after falling to the lowest since July 12 at $899.50. Palladium was down two percent at $920.25 an ounce, maintaining its premium over platinum, which it moved into last week for the first time since 2001. —