Gold hits over 2-month highs

Source:Reuters-Global Times Published: 2017/8/10 18:18:39

N.Korea tensions fuel demand for the precious metal

Gold lingered near a two-month high hit earlier on Thursday, bolstered by safe-haven demand triggered by rising tensions on the Korean Peninsula.

North Korea on Thursday dismissed warnings made by US President Donald Trump that it would face "fire and fury" if it threatened the US as a "load of nonsense" and outlined detailed plans for a missile strike near the US island territory of Guam in the Western Pacific.

"[Safe-haven demand] has settled down to a certain extent, but the market is still expecting more news to come," said Brian Lan, managing director at gold dealer GoldSilver Central in Singapore.

"It doesn't seem likely that North Korea is going to back down and the US has also made a very strong stance this time."

Geopolitical risk can boost demand for assets seen as safe-havens such as gold.

Spot gold had risen 0.16 percent to $1,279.34 per ounce. The precious metal climbed 1.3 percent in the previous session, its biggest gain since mid-May, and touched $1,279.64 an ounce, it highest level since June 9.

US gold futures for December delivery rose 0.4 percent to $1,284.40 per ounce.

"Amid all the sabre-rattling, we expect gold prices to continue to move higher and likely cross the $1,300 an ounce mark in a relatively short order," said New York-based financial services company INTL FCStone analyst Edward Meir.

The market was also waiting for data that would offer clues about the extent to which the strengthening US labor market is spilling over into inflation.

"Investors tend to be more cautious ahead of economic data, especially when the prices are high. They might take profits first and wait to see what's going to happen before they move into the market again," said GoldSilver's Lan.

In other precious metals, silver rose to $17.07 per ounce, after hitting its highest since June 15 earlier in the session.

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