Gold turns up as dol­lar weak­ens from its highs; Trump warns Py­ongyang

Business World - - WORLD MARKETS -

NEW YORK/LON­DON — Gold bounced up from the low­est level in more than a week on Tues­day as the dol­lar pared gains and US Pres­i­dent Don­ald Trump said United Na­tions sanc­tions on North Korea are “noth­ing com­pared to what ul­ti­mately will have to hap­pen.”

Spot gold hit its low­est since Sept. 1 at $1,322.15 an ounce in early trade and was up 0.30% at $1,330.68 an ounce by 2:37 p.m. EDT (1837 GMT).

US gold fu­tures set­tled down 0.20% at $1,332.70.

Gold prices turned pos­i­tive af­ter Mr. Trump said the lat­est UN sanc­tions on North Korea were only a very small step and noth­ing com­pared to what would have to hap­pen to deal with the coun­try’s nu­clear pro­gram.

“That’s pretty ag­gres­sive rhetoric on his part and that’s brought gold back up,” said Bob Haberkorn, se­nior mar­ket strate­gist for RJO Fu­tures in Chicago.

Gold rose to a one-year high last week, but slid 1.40% on Mon­day in its big­gest one- day drop in two months as con­cerns eased about North Korea’s nu­clear am­bi­tions and the im­pact of hur­ri­cane Irma.

“It was the weak­ness of the dol­lar that was re­ally driv­ing gold, and the ten­sions with North Korea,” Natixis an­a­lyst Bernard Dah­dah said. “The rate at which the dol­lar can still de­pre­ci­ate is slow­ing down.”

The dol­lar in­dex came off its ses­sion highs but re­mained above Fri­day’s two-and-a-half-year low.

The S& P 500 and a gauge of global eq­uity mar­kets hit new highs as in­vestors opted for nom­i­nally higher-risk as­sets over havens such as gold and the Ja­panese yen.

“The mar­ket is likely to turn its at­ten­tion to the Fed, with speak­ers now in black­out mode ahead of its pol­icy meet­ing next week,” ANZ said in a note.

The Fed­eral Re­serve has raised US in­ter­est rates twice this year in re­sponse to up­beat growth data and fall­ing un­em­ploy­ment, but per­sis­tently soft in­fla­tion fig­ures have tem­pered ex­pec­ta­tions for an­other hike in De­cem­ber.

Gold is highly sen­si­tive to ris­ing US in­ter­est rates, as they in­crease the op­por­tu­nity cost of hold­ing non-yield­ing bul­lion, while boost­ing the dol­lar, in which it is priced.

Hold­ings of the world’s largest gold-backed ex­change-traded fund, SPDR Gold Shares, rose 1.20 tons on Mon­day, data from the fund showed, af­ter three days of out­flows.

Among other pre­cious met­als, silver was up 0.30% at $17.85 an ounce af­ter hit­ting its low­est since Sept. 1 at $17.67.

Plat­inum was down 0.50% at $ 985.20, while pal­la­dium was 1.80% higher at $948.30 an ounce. —

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