Gold prices fall
BENGALURU. — Gold prices fell in early trade yesterday as easing tension between the US and North Korea saw investors seek riskier assets like equities.
Spot gold was down 0,5 percent at $1 275,79 per ounce, as of 3.15am GMT. US gold futures for December delivery shed 0,7 percent to $1 281,40 per ounce.
North Korean leader Kim Jong-un received a report from his army on its plans to fire missiles towards Guam and said he would watch the actions of the US for a while longer before making a decision, the North’s official news agency said on Tuesday.
“It’s no surprise that gold is trending a little lower this morning. Some risk aversion is taken off the table simply because some concerns of the North Korean attack has eased,” said OCBC analyst Barnabas Gan.
“Safe-haven flows into the yen and gold has fallen a little bit because of improved risk appetite in the market.”
Asian shares rallied and the dollar firmed on Tuesday after North Korea’s leader signalled that he would delay plans to fire a missile near Guam, further easing tension and prompting investors to move back into riskier assets. Geopolitical risks can boost demand for safe-haven assets such as gold and the Japanese yen.
“It is safe to say that the safe-haven demand is badly quelled. The Asian markets are poised to build on this momentum,” said Naeem Aslam, chief market analyst at Think Markets.
“Having said that, the latest comments by the US defence secretary has upped the ante somewhat by saying if North Korea fires a missile at US, it would mean a war. So the latest pull back in the gold price doesn’t mean that the bulls are out of energy,” Aslam added.
Defence Secretary Jim Mattis warned on Monday that the US military would be prepared to intercept a missile fired by North Korea if it was headed to Guam. Also weighing on the metal was the prospect of another raise in US interest rates by the Federal Reserve in 2017, with one influential member, New York Fed President William Dudley backing the same.
Spot gold could fall more to $1 267 per ounce, as it had broken a support at $1 278, Reuters technical analyst Wang Tao said. Among other metals, silver edged down 1 percent to $16,85 per ounce. Platinum fell 0,5 percent to $960,15, after earlier touching its lowest in a week at $956,90, and palladium dipped 0,1 percent at $894,22. Reuters.