LONDON: Gold prices rebounded from seven-week lows on Tuesday after North Korea fired a missile into Japanese waters, raising geopolitical tensions and boosting bullion’s safe-haven appeal.
North Korea said it successfully test-launched an intercontinental ballistic missile, days before leaders from the Group of 20 nations are due to discuss steps to rein in Pyongyang’s weapons programmes.
Gold is typically seen as a store of value and therefore a safe-haven investment in times of economic and political uncertainty, when investors tend to sell riskier assets such as stocks.
World shares, oil and bond yields pulled back on Tuesday as North Korea’s long-range missile test and July 4 holidays for US markets curbed investor appetite for risk. Spot gold was up 0.3 per cent at $1,223.37 an ounce by 1345 GMT, while US gold futures climbed 0.3pc to $1,222.60 an ounce.
“The market is turning to gold over the conflict in North Korea,” Danske Bank senior analyst Jens Pedersen said. “But the market isn’t pricing in a further deterioration in relations because this conflict has been going on for a while.”
Gold fell 1.7pc on Monday, the most in one day since November and reaching its lowest point since May.
Silver slipped 0.1pc to $16.06 an ounce, after touching its lowest since May 9 at $16.01.
Platinum rose 1pc to $911 an ounce, having fallen on Monday to below $900 for the first time since May 10. Palladium advanced 1.6pc to $857.10 an ounce.
Published in Dawn, July 5th, 2017
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