Gold Hits Two-Month High on North Korea Tensions


Gold prices are set to jump to a four-year high of $1,400 an ounce by the end of the year over mounting tensions between North Korea and the USA, and surging demand in the world's biggest consumers, according to the head of precious metals at a Russian investment bank.

The Swiss franc reversed a two-week losing streak, rising rose 1.12 per cent versus the greenback at 0.96 per dollar.

Global stocks lost almost $1 trillion in value last week after President Donald Trump warned North Korea that it would face "fire and fury" if it threatened the United States, leading to a war of words between Pyongyang and Washington.

The MSCI World index slipped 0.15%, extending Thursday's 1.1% drop, its biggest one-day slide since May 17.

The euro was down 0.1 percent at $1.175 while the dollar fell 0.6 percent to 109.68 yen.

The Korean story has seen the yen gain around 1.5 percent this week, its biggest rise since mid-May. In response, safe-haven assets such as the yen, Swiss franc and gold strengthened overnight.

Japan is the world's biggest creditor nation and there is an assumption Japanese investors may repatriate their foreign holdings in times of heightened global uncertainty.

Our European opening calls:$FTSE 7509 -0.45% $DAX 12217 -0.61% $CAC 5185 -0.66%$IBEX 10668 -0.62%$MIB 21899 -0.68%.

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"I think what the President was doing was sending a strong message to North Korea", Tillerson said.

"Risk-off sentiment dominates Asian markets into the end of the week with President Donald Trump's words still sending shockwaves into the markets", said Jingyi Pan, market strategist at online trader IG. Pyongyang said it was examining plans for attacking Guam, a US territory in the Pacific with a military base.

The market volatility - the VIX index, nicknamed " the fear index, had been dashed the night before - remained high compared to the evolution since the beginning of the year.

Geopolitical woes between the USA and North Korea escalated overnight following announcements by the presidents of both countries. This news drove up U.S. Treasury yields, making the U.S. Dollar a more attractive investment. But despite the largest percentage drop in over a month on a global equities index, USA equities ended only slightly lower as healthy corporate earnings and a recent string of strong economic data enticed investors into beaten-down stocks. -North Korean tensions and Friday's weak US inflation data.

The dollar last changed hands at 108.96 yen, down 0.2 percent.

Markets are now focused on U.S. consumer price data for July, due later in the session. They have soared more than 2% in the previous two sessions, and are set for a weekly gain of 2.25%. US crude rose 1.08 percent to $49.70 per barrel and Brent was last at $52.78, up 1.23 percent on the day.

Gold was out of favor on Monday after clocking a 2.46 percent jump last week.

Ongoing global glut concerns lingered in oil markets despite a bigger-than-expected draw in US crude inventories, leaving prices volatile. The RBNZ left rates unchanged at record lows of 1.75 percent and maintained its "on hold" guidance for monetary policy.