August 10, 2017 / 10:11 AM / 10 days ago

PRECIOUS-Gold at two-month high on U.S.-North Korea tensions

    * North Korea tensions stoke safe-haven demand for gold
    * Silver touches highest since mid-June
    * Platinum at highest price since April

 (Updates prices; adds comment, second byline, NEW YORK
dateline)
    By Marcy Nicholson and Eric Onstad
    NEW YORK/LONDON, Aug 10 (Reuters) - The price of gold rose
on Thursday for the third straight day, reaching a two-month
high as another exchange of threats by the United States and
North Korea prompted investors to buy bullion as a safe-haven
asset. 
    North Korea said it was completing plans to fire four
intermediate-range missiles over Japan to land near the U.S.
Pacific island territory of Guam.               
    Stocks around the world fell sharply, and investors moved
into safer assets.            
    "For now, the uptrend is very much intact in gold, reacting
to external geopolitical events," said commodities analyst
Jonathan Butler of Mitsubishi in London.
    The spot gold price        had gained 0.6 percent at
$1,284.71 an ounce by 1:57 p.m. EDT (1757 GMT) after reaching
its highest level since June 8 at $1,287.73. It rose 1.3 percent
in the previous session, the biggest increase since mid-May. 
    U.S. gold futures         for December delivery settled up
0.8 percent at $1,290.10.
    "The war of words between the leaders of the U.S. and North
Korea continue to dominate investor sentiment," said Forex.com
technical analyst Fawad Razaqzada.
    "Gold and silver are higher, thanks mainly to their status
as safe-haven commodities."
    Another source of support to bullion was data showing U.S.
producer prices unexpectedly fell in July, pointing to a further
moderation in inflation that could delay a Federal Reserve
interest rate increase.             
    Monthly U.S. inflation readings should rise, even while it
takes longer for the annual measures preferred by the Fed to
rebound, New York Fed President William Dudley said.
            
    The market was waiting for U.S. consumer inflation data on
Friday that would offer more clues about future Fed decisions.
    UBS said in a note it had increased its long position in
gold as forward real interest rates declined and commodity
prices increased, while it also added to longs in the platinum
group metals as investment demand rose.
    Physical gold demand, however, was sluggish in India, while
the rally in global prices dampened buying elsewhere in Asia and
holdings of the largest gold-backed exchange-traded-fund      
were unchanged on Wednesday.                          
    "At least in this segment, investors apparently remain
reluctant to seek gold's safe haven," Norbert Rücker, head of
macro and commodity research at Julius Baer, said in a note.    
  
    Silver        was up 1.1 percent at $17.08 an ounce after
breaching its 200-day moving average and hitting $17.24, its
highest since June 14.
    Platinum        gained 0.8 percent to $979.85 per ounce
after touching $983.60, the highest since April 18. 
    Palladium        climbed 1 percent to $900.30.

 (Additional reporting by Nithin Prasad in Bengaluru; Editing by
Greg Mahlich and Lisa Von Ahn)
  

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