Global gold prices steady at near 1-week high on North Korea worries2 min read . Updated: 26 Sep 2017, 05:21 PM IST
Gold prices ease under pressure from the dollar on Tuesday but are still near one-week highs as North Korea appears to have boosted coastal defences amid rising tension with the US
London: Gold prices eased under pressure from the dollar on Tuesday but were still near one-week highs as North Korea appeared to have boosted coastal defences amid rising tension with the US.
Spot gold shed 0.4% to $1,305.18 per ounce at 3.41pm, after earlier marking its highest since 20 September at $1,313.54. It gained more than 1% the previous session. US gold futures rose 0.3% to $1,308 per ounce.
“Geopolitics haven’t come off the table. They are still front and centre but after a rally you tend to get a tiny bit of a pullback," said ETF Securities commodity strategist Nitesh Shah. “The rhetoric from both North Korea and the United States remains quite heated."
North Korea appears to have boosted defences on its east coast, South Korea’s Yonhap news agency reported, after the North said US President Donald Trump had declared war and that it would shoot down US bombers flying near the peninsula.
Bullion is used as an alternative investment during times of political and financial uncertainty, generally gaining along with US Treasuries and the Japanese yen.
Elsewhere, investors awaited a speech on “inflation, uncertainty, and monetary policy" by US Federal Reserve Chair Janet Yellen, in Cleveland at 10.15pm. Ahead of Yellen’s speech, Fed officials gave mixed signals on the likely path for interest rate increases.
New York Fed President William Dudley said the US central bank is on track to gradually raise rates given factors that have depressed inflation are “fading", while two other Fed officials expressed the need to stay put on further tightening.
Gold is highly exposed to interest rates and returns on other assets, as rising rates lift the opportunity cost of holding non-yielding bullion.
The US dollar index gained 0.3% against a basket of currencies, making commodities including gold more expensive for holders of other currencies. Geopolitical jitters kept world stocks down for a fourth straight session.
In physical demand, China’s net gold imports via main conduit Hong Kong plunged 55% in August from the previous month, data showed on Tuesday.
Meanwhile, silver fell 0.8% to $17 per ounce. In the previous session, prices rose more than 1% to register their biggest intra-day percentage gain since 7 September. Platinum climbed 0.6% to $934.20 per ounce, after also registering its biggest one-day percentage gain since 7 September in the previous session. Palladium bucked the downward trend by rising 0.2% to $912.50 per ounce. Reuters