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Gold eased under pressure from the dollar on Tuesday but was still near one-week highs as North Korea appeared to have boosted coastal defences amid rising tension with the United States.
Spot gold shed 0.4 per cent to $1,305.18 per ounce at 1011 GMT, after earlier marking its highest since Sept. 20 at $1,313.54. It gained more than 1 per cent the previous session. US gold futures rose 0.3 per cent 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 1645 GMT.
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 per cent 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 per cent in August from the previous month, data showed on Tuesday. Meanwhile, silver fell 0.8 per cent to $17 per ounce.
In the previous session, prices rose more than 1 per cent to register their biggest intra-day percentage gain since Sept. 7.
Platinum climbed 0.6 per cent to $934.20 per ounce, after also registering its biggest one-day percentage gain since Sept. 7 in the previous session. Palladium bucked the downward trend by rising 0.2 per cent to $912.50 per ounce.
Gold demand picked up in most Asian centres last week as prices of the yellow metal slid to a six-month low, with gold being sold at a premium in India for the first time in seven weeks.
Gold fell to its lowest in nearly six months on Wednesday as a higher dollar and a technical sell-off overwhelmed safe-haven buying spurred by fears of a trade war between the world’s top two economi
The Gulf Today
Gold fell on Friday after stronger than forecast US payrolls data boosted expectations that the Federal Reserve will press ahead with another US interest rate hike this month, lifting the dollar.
Gold prices fell for a second session on Monday after US President Donald Trump revived hopes that he would meet North Korean leader Kim Jong Un next month, lowering political tensions and demand for
The Gulf Today
Gold prices rose on Wednesday on uncertainty about trade talks between the United States and China, which boosted the metal’s safe-haven appeal, but a firmer dollar kept a lid on gains.