Gold hits more than nine-month peak after N.Korea missile test
Gold jumped to its highest since November on Tuesday as investors bought bullion as insurance against falling prices of other assets after North Korea tested a missile over Japan.
"Funds and traders are filling their boots with gold at the moment and so far that`s justified," said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen.
"No matter where you look you can`t point your finger at anything that`s gold 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 $1,320.64 an ounce by 1355 GMT after touching $1,325.94, its highest since Nov. 9.
U.S. gold futures for December delivery rose 0.9 percent to $1,326.50.
Spot gold 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 North Korea fired a ballistic missile over Japan`s northern Hokkaido island into the sea early on Tuesday, escalating tensions on the Korean peninsula.
European stocks fell as much as 1.7 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 store of value during volatility in other markets.
The next targets for gold are $1,337 an ounce, based on the November high after the U.S. election, and about $1,375, last year`s peak after Britain`s vote to leave the European Union, Hansen said.
Holdings of SPDR Gold Trust, the world`s largest gold-backed exchange-traded fund, rose 1.1 percent to 814.36 tonnes on Monday.
Other precious metals benefited, with silver rising 1 percent to $17.60 after touching $17.67, its highest since April 25.
Silver, which broke its downtrend when moving above $17.50, is poised for further gains, Hansen said.
"If we see this breakout starts to stick, you could argue that silver has the opportunity to do some catching up since the (bullish) investment positioning in silver is much lighter than in gold," he said.
Platinum gained 1.2 percent to $998.50 after marking its highest since March 2 at $1,006.30.
The metal has confirmed a double bottom formation, Stéphanie Aymes, head of technical analysis at Societe Generale, said in a note. "Potential for the pattern will be at $1,040/$1,046, also the highs of March," Aymes said.
Palladium was up 1 percent at $943, having hit a more than 16-year high of $948.50.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
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