Gold edges up, hovers near one-year high on haven demand
Gold prices edged up on Tuesday, hovering around their highest levels in nearly a year, as North Korea’s most powerful nuclear test to date underpinned haven demand for the precious metal.
Spot gold rose 0.1% to $1,335.76 per ounce by 9.33am after touching its strongest since late September in the previous session. US gold futures for December delivery were up 0.8% at $1,341.30.
“Safe-haven buying’s been fairly strong over the past few days but there’s still a level of uncertainty about what the North Korean crisis will mean for markets,” ANZ analyst Daniel Hynes said.
Stock markets were under pressure on Tuesday following a global selloff the previous day in the wake of North Korea’s nuclear test, while the dollar slipped against the yen and Swiss franc amid signs the North could conduct more missile tests.
North Korea has been observed moving what appeared to be an intercontinental ballistic missile (ICBM) towards its west coast, South Korea’s Asia Business Daily reported on Tuesday, citing an unidentified intelligence source.
US accused North Korea’s trading partners on Monday of aiding its nuclear ambitions and the White House declared that “all options to address the North Korean threat are on the table.”
“Gold prices continued to point north this morning, suggesting that risk appetite remains underwater,” OCBC analyst Barnabas Gan said. “Concerns over geopolitical tensions will likely dominate sentiments for the week ahead.”
Gold is used as an alternative investment during times of political and financial uncertainty. Spot gold still targets $1,345 per ounce, as it has cleared a resistance at $1,333, Reuters technical analyst Wang Tao said.
Among other precious metals, silver slipped 0.3% to $17.84 an ounce, while platinum was nearly unchanged at $1,006.35 an ounce. Palladium was up 0.1% at $977.60 after reaching its peak since February 2001 at $1,001 in the previous session.