Commodities

Gold on track for two-month high as geopolitical tensions incited safe-haven buying

Gold price factors

The price of gold reached its best level on Friday and is now on track for a two-month high. The yellow metal has been rising for four straight sessions due to the elevated geopolitical tensions have triggered investors to buy safe haven assets such as gold.

U.S. President Trump said to North Korea and its leader Kim Jong-un that if they continue to threat his country it would be met with “fire and fury”, hours after his comments, the hermit state responded that it is carefully planning a strike in the U.S. Pacific territory of Guam. North Korea also disclosed a plan to fire missiles to the allies of U.S. over Japan.

Looking on gold prices; U.S. gold futures advanced as high as 0.3 percent to settle at $1,294.10 an ounce for its December delivery. Spot gold rose more than 0.2 percent to finish at $1,287.90 an ounce. Spot reached its best level since June 8 at 1,288.52 per ounce on the previous session.

The U.S. dollar falling to an eight-week low versus the Japanese yen also weighed on prices. A weaker is good for the yellow metal because its makes the non-yielding bullion cheaper for holders outside the United States, which will further strengthen the demand.

Elsewhere in Asia, the demand of gold in India is still weak over the course of the week as local prices reached their highest level in almost three months. A rally in global prices of gold has reduced fresh buying.

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