Gold buoyed by North Korea tensions, U.S. inflation data

Gold buoyed by North Korea tensions, U.S. inflation data

Gold buoyed by North Korea tensions, U.S. inflation data

It was on course for a weekly rise of about 5%, the biggest such gain since July 2016. "What we're seeing today is political tensions over North Korea and the United States. making people nervous", said Robert Pavlik, chief market strategist at Boston Private Wealth in NY.

Global benchmark Brent also fell 0.9 per cent to $51.44, after Thursday's 1.5 per cent drop.

South Korea's KOSPI fell 1.4 percent, taking its losses this week to almost 3 percent.

U.S. President Donald Trump did not have any fresh words for Pyongyang, but Defense Secretary Jim Mattis warned on Monday that the U.S. military would be prepared to intercept a missile fired by North Korea if it was headed to Guam.

Possibly due to the lack of appetite for risk in the market, the euro suffered on Thursday, down slightly against the dollar by 0.09% at 1.1749, slipping towards a two week low.

"I do think I expect inflation to also start to move higher in the medium term but probably not get all the way back to 2-percent on a year-over-year basis, because, remember, we've had these very weak inflation readings for a number of month", Dudley said.

Weakness in U.S. Treasury yields may also be supporting the yen, some analysts said.

On Wall Street on Monday, U.S. stocks recovered from last week's selloff, when fears of conflict between the United States and North Korea helped wipe out almost $1 trillion from global equity markets.

U.S. Treasury yields US10YT=RR fell to as low as 2.197 percent, their lowest level since June 28, overnight.

United States officials also played down the likelihood of a nuclear conflict with North Korea.

The yen tends to benefit during times of geopolitical or financial stress as Japan is the world's biggest creditor nation and there is an assumption that Japanese investors there will repatriate funds should a crisis materialise.

The franc fell 0.8 percent against the USA dollar to 0.9694 francs, its biggest drop since July 27 according to Thomson Reuters data. It is set for a weekly gain of 2.4 percent.

Coupled with a continued simmering tension between the USA and North Korea, that trio of data led to another positive day for safe haven currencies such as the Japanese yen and Swiss franc (CHF). The Nikkei index slipped nearly 1 percent after hitting a three-month low even after data showing robust 1.0 percent second-quarter growth in Japan.

Meanwhile, the dollar edged higher against a trade-weighted basket of currencies after posting its biggest weekly drop in three weeks as expectations of USA rate increases dwindled further after weak inflation data.

US producer prices unexpectedly recorded their biggest drop in almost a year, and the number of Americans filing for unemployment benefits unexpectedly rose last week.

Spot gold added 0.7 per cent to $1,285.70 an ounce.

Crude futures, meanwhile, extended losses on fears of slowing demand and lingering concerns over global oversupply.

Palladium climbed 0.2 percent to $898.30 per ounce and was on track to end the week 2.4-percent higher.

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