September 4, 2017 / 4:15 AM / a year ago

PRECIOUS-Gold prices near 1-year high in wake of N.Korea nuclear test

    * Spot gold may gain more to $1,345/oz -technicals
    * Silver hits over 4-mth high, platinum 6-mth high
    * Palladium at highest since February 2001

 (Adds comments, updates prices)
    By Apeksha Nair
    Sept 4 (Reuters) - Gold prices climbed 1 percent to their
highest in almost a year on Monday after North Korea's latest
and most powerful nuclear test drove investors towards
safe-haven assets.
    Spot gold        had risen just over 1 percent to $1,338.36
per ounce by 0708 GMT, after earlier touching its strongest
level since late September at $1,339.47.
    U.S. gold futures         for December delivery were up 1
percent at $1,344 an ounce.
    "Gold has rallied following further escalation in
geopolitical tensions around North Korea," said Jameel Ahmad,
vice president of Market Research at FXTM.
    "This looks like safe-haven buying from traders. These
tensions do not look like they are going anywhere, and are
likely to encourage investors to hold on to their gold
positions," Ahmad said. 
    North Korea on Sunday conducted its sixth nuclear test, of
what it said was an advanced hydrogen bomb, prompting the threat
of a "massive" military response from the United States if it or
its allies were threatened.              
    The Japanese yen and sovereign bonds also climbed on Monday
as North Korea's nuclear test provoked a knee-jerk shift to safe
havens, though equity losses were modest.                   
    Adding to tensions, Russia on Sunday denounced the closure
of three Russian diplomatic facilities in the United States as a
"blatantly hostile act" that violated international law and
demanded Washington reverse the order.             
    "Another plus for gold is that we don't see an immediate
rate hike and the shrinkage of the Federal Reserve's balance
sheet," said Mark To, head of research at Hong Kong's Wing Fung
Financial Group. 
    On Friday, after a U.S. government report showed employers
added fewer jobs in August than expected, traders held to
expectations that the Federal Reserve would wait until the
middle of 2018 before raising rates.                          
    Gold is highly sensitive to rising interest rates, as these
increase the opportunity cost of holding non-yielding bullion,
while boosting the greenback.
    Investors were also looking ahead to a European Central Bank
(ECB) meeting on Thursday. 
    Markets are expecting no policy change from the ECB this
month but the bank is likely to announce a reduction of its
monthly asset purchases in October, according to a majority of
economists in a Reuters poll.              
    Spot gold may gain more to $1,345 per ounce, as it has
pierced a resistance at $1,333, Reuters technical analyst Wang
Tao said.              
    Silver        rose 1 percent to $17.85 an ounce, earlier
touching its highest since late April at $17.90 an ounce.
    Platinum        gained 0.7 percent to $1,011.50. It had
previously marked its best since early March at $1,014.70. 
    Palladium        added 0.9 percent to $988.90, after earlier
 reaching its highest since February 2001 at $1,001.    

 (Reporting by Apeksha Nair in BENGALURU; Editing by Joseph
Radford and Tom Hogue)
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