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Gold up after North Korea fires another missile over Japan


By Apeksha Nair

- Gold inched up on Friday as North Korea's latest missile launch over triggered safe-haven buying, but gains were limited as strong U.S. data raised the spectre of another interest

Spot gold edged up 0.1 percent to $1,330.79 an ounce by 0321 GMT, after dropping to its lowest since Aug. 31 at $1,315.71 in the previous session.

The metal was, however, down 1 percent for the week, and on track to mark its first weekly decline in four.

U.S. gold futures for December delivery gained 0.4 percent to $1,334.80 an ounce.

North Korea fired a missile on Friday that flew over Japan's northern island of Hokkaido far out into the Pacific Ocean, South Korean and Japanese officials said, further ratcheting up tensions after Pyongyang's recent test of a powerful nuclear bomb.

Geopolitical risks can boost demand for safe haven assets such as gold and the Japanese yen.

The yen held steady against the dollar on Friday, after earlier having risen on the news, with further losses for the greenback capped after strong U.S. consumer data.

"There are a couple of issues pushing and pulling at the market. The reaction to the missile launch this morning has been a bit negated by that better-than-expected number we saw out of the U.S. overnight," ANZ analyst Daniel Hynes said.

"I think the market is increasingly focusing on the Federal Reserve and its probability of another this year."

The Fed has a 2 percent target, and a series of subdued readings have dampened expectations for further rate rises in the near term. Firming could support the case for another

Higher interest rates tend to boost the dollar and push bond yields up, putting pressure on gold prices by increasing the opportunity cost of holding non-yielding bullion.

The Fed's next monetary policy meeting is due to begin on Sept.19.

Signals for spot gold turned neutral again, as it came back into a narrow range of $1,321-$1,335 per ounce, said technical analyst Wang Tao.

Silver was up 0.3 percent to $17.80 an ounce, after touching its lowest since Sept. 1 in the previous session.

Platinum rose 0.2 percent to $980.05 an ounce, and was pulling away from its lowest since late August, hit in the previous session.

Palladium gained 0.2 percent to $924.50, after marking a four-week low on Thursday.

(Reporting by Apeksha Nair in Bengaluru; Editing by Kenneth Maxwell)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Fri, September 15 2017. 09:13 IST