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Gold hits more than nine-month high after North Korea missile test

Spot gold was up 0.9% at $1,321.04 an ounce

Reuters  |  London 

Gold prices

jumped to its highest since November on Tuesday as investors bought bullion as insurance against falling prices of other assets after tested a missile over

"Funds and traders are filling their boots with at the moment and so far that's justified," said Ole Hansen, head of commodity strategy at in

"No matter where you look you can't point your finger at anything that's negative. Stocks are coming off hard, the dollar has weakened and now also against the yen, which has been the missing link, while bond yields are also taking a beating."

Spot gold, which rose for a third straight session, was up 0.9 percent at $1,321.04 an ounce by 0940 GMT after touching $1,325.94, its highest since Nov. 9.

U.S. futures for December delivery rose 0.9 percent to $1,327.

Spot had climbed by 1.4 percent on Monday, breaking through key resistance and marking its biggest one-day percentage rise since mid-May after comments by the head of the European Central Bank boosted the euro and hit the dollar.

Gains were then extended after fired a ballistic missile over Japan's northern Hokkaido island into the sea early on Tuesday in a sharp escalation of tensions on the Korean peninsula.

"North Korea's missiles over the Japanese Hokkaido islands obviously fuelled buying for the flight to safety," said Yuichi Ikemizu, Tokyo branch manager at ICBC Standard Bank.

European stocks fell more than 1 percent to a six-month low, also weighed down by the strengthening euro. [MKTS/GLOB]

Geopolitical risks can boost demand for safe-haven assets such as gold, which is considered a good store of value during volatility in other

The next targets for are $1,337 an ounce, based on the November high after the U.S. election, and around $1,375, last year's peak after Britain's vote to leave the European Union, Hansen said.

Holdings of SPDR Trust, the world's largest gold-backed exchange-traded fund, rose 1.1 percent to 814.36 tonnes on Monday.

Among other precious metals, silver rose 0.4 percent to $17.48 after touching $17.63, its highest since June 8.

Platinum gained 0.9 percent to $995.50 after marking its highest since March 2 at $1,000,40.

Palladium was up 0.9 percent at $941.75, having hit a more than 16-year high of $948.50.

First Published: Tue, August 29 2017. 17:20 IST