Gold price inches closer to $1,300 as U.S.-North Korea tensions return
New York (Aug 21) Gold prices edged up and moved closer to the $1,300 level on Monday, boosted by a flight to perceived safer assets as the war of words between the U.S. and North Korea returned to the fore.
Gold for December delivery GCZ7, +0.15% added $1, or 0.1%, to $1,292.60 an ounce, erasing an 80-cent drop from Friday. The contract briefly jumped above $1,300 in Friday’s session after a terrorist attack in Barcelona, Spain, and concerns about President Donald Trump’s pro-business agenda helped spark a rush to haven assets.
“Demand for gold is likely to remain high nonetheless, as the U.S. and South Korea began a joint military exercise earlier today. This could rekindle the conflict between the U.S. and North Korea, which had taken something of a back seat again recently,” analysts at Commerzbank said in a note.
Pyongyang warned on Sunday that the annual U.S.-South Korea military exercises are “reckless behavior driving the situation into the uncontrollable phase of a nuclear war.”
“Generally speaking, however, the rise in the gold price remains speculatively driven,” the Commerzbank analysts added.
According to the weekly Commitments of Traders report from the Commodity Futures Trading Commission, net long positions in gold GCZ7, +0.15% soared 30% for the week ended Tuesday to 179,537 contracts from 138,566 the week before. That marks the highest level of net longs among speculators since October.
“This was already the fifth weekly increase in a row, net long positions being expanded almost eight-fold during this period. In this context, more short positions were covered than long positions were built up,” the analysts said.
In other metals, copper for September HGU7, +1.00% rallied 1.2% to $2.97 a pound, while silver for the same month SIU7, +0.35% was marginally lower at $16.99 an ounce.
September palladium PAU7, +1.05% jumped 0.8% to $934.60 an ounce, while platinum for October PLV7, +0.34% added 0.2% to $984.10 an ounce.
MarketWatch
