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North Korean “saber-rattling” sees gold hit two-month high

North Korean parade

The ongoing standoff between North Korea and America has seen gold rise to a two-month high. The war of words between Washington and Pyongyang saw the price of gold rise to $1,278.49 this morning with future gold for December delivery up 1.3% at $1,279.30.

The recent resilience of data on the US economy has not dampened the latest climb, despite depressing prices earlier in the week as reports returned high employment figures ahead of further US inflation information this week.

The unpredictability of the isolationist rogue state of North Korea has significantly impacted gold. “We believe continued saber-rattling … could take gold prices higher still,” Nitesh Shah, director at ETF Securities, told Reuters. North Korean state media has stated that Pyongyang now plans to fire a number of missiles, over Japan and towards the US Pacific territory of Guam.

Japanese politicians have said the country may attempt to shoot down any missiles in their airspace following recent constitutional changes.

The tension and severity of the potential consequences of further escalation have effected equities, thereby making the safe-haven of gold attractive to investors. A gauge of volatility on the S&P 500, the VIX hit its highest reading for over a month.

Head of commodity strategy at Saxo Bank, Ole Hansen, told Reuters he sees further rises for gold, albeit under a ceiling: “The market hates uncertainty and that’s certainly what we have now. But looking ahead, unless we start to see a conflict breakout or a major stock market correction, (gold) is capped at $1,295, (although) the upside at the moment is the favoured direction.”

However, other analysts were less bullish, saying geopolitical factors often weigh fleetingly on gold. “Tensions over North Korea lend support to safe-haven assets, particularly gold. Geopolitics is a binary wild card that usually only provides a temporary boost to safe-haven assets. We believe the recent recovery should run out of steam once the US dollar regains strength,” said Norbert Rücker, Julius Baer’s head of Macro & Commodity research.

In other news the World Gold Panning Championships have entered their fourth day ahead of the weekend finals in Moffat Scotland.

Photo Credit: Uwe Brodrecht

Link to this article: : http://www.goldmadesimplenews.com/gold/north-korean-saber-rattling-sees-gold-hit-two-month-high-13337/

Posted by on Aug 10 2017. Filed under Gold News. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.

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