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PRECIOUS-Gold at near-two-month peak on North Korean tensions
August 9, 2017 / 10:22 AM / 2 months ago

PRECIOUS-Gold at near-two-month peak on North Korean tensions

    * N.Korea says considering missile strike on Guam
    * Trump boasts of U.S. nuclear arsenal after warning N.Korea
    * Dollar falls against Swiss franc
    * Platinum hits 3-1/2-month high

 (Updates prices; adds comment, second byline, NEW YORK
dateline)
    By Marcy Nicholson and Maytaal Angel
    NEW YORK/LONDON, Aug 9 (Reuters) - Gold rose to the highest
in nearly two months on Wednesday, after North Korea said it is
considering an attack on the U.S. Pacific territory of Guam and
U.S. President Donald Trump boasted of the strength of the
American nuclear arsenal.             
    Bullion was on track for its biggest one-day rise in nearly
three months.
    The tensions rattled global markets, sending investors out
of equities and into the safety of the Swiss franc, government
debt and gold. The VIX "fear gauge" of expected volatility on
the S&P 500 hit its highest in more than a month.            
    "The market hates uncertainty and that's certainly what we
have now," said Ole Hansen, head of commodity strategy at Saxo
Bank. 
    "But looking ahead, unless we start to see a conflict break
out or a major stock market correction, (gold) is capped at
1,295, (although) the upside at the moment is the favored
direction." 
    Spot gold        was up 1.25 percent at $1,275.98 an ounce
by 2:30 p.m. EDT (1830 GMT), after reaching its highest since
mid-June at 1276.10. U.S. gold futures         for December
delivery settled up 1.3 percent at $1,279.30.
    The rally came after Tuesday's drop to a two-week low on
better-than-expected U.S. jobs data, while investors awaited
U.S. inflation figures later this week for further clues about
the pace of interest rate rises.
    "We've had some competing forces play out over the past 12
hours - the U.S. dollar was stronger off economic data, but that
was quickly reversed with President Trump's comments about North
Korea," ANZ analyst Daniel Hynes said.        
    The dollar        turned lower versus a basket of currencies
Wednesday and was at a near two-week low against the Swiss
franc, a traditional safe haven.
    A weak greenback makes dollar-priced gold cheaper for
non-U.S. investors.
    "We believe continued saber-rattling ... could take gold
prices higher still," said Nitesh Shah, director at ETF
Securities.
    Platinum        gained 0.6 percent at $972.90 per ounce,
having hit its highest since April 21 at $980.60. 
    Platinum extended its four-week rally even after South
African President Jacob Zuma survived a no-confidence vote in
parliament, causing the rand        to fall against the U.S.
dollar. 
    "The weaker currency lowers the production costs for
platinum mining producers," said Commerzbank in a note.
            
    Silver        rose 2.8 percent to $16.87, on track for its
biggest one-day rally since September 2016 after rising to
$16.91, the highest since June 15. Spot palladium        fell 1
percent to $888.30.

 (Additional reporting by Nithin Prasad in Bengaluru; Editing by
David Holmes and Chizu Nomiyama)
  

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