Gold prices at 2-month highs as geopolitical tensions escalate
Investing.com - Gold prices were hovering at two-month highs on Friday, as mounting tensions between the U.S. and North Korea continued to support strong demand for safe-haven assets.
On the Comex division of the New York Mercantile Exchange, gold futures for December delivery were steady at $1,291.15, just off a two-month peak of $1.294,60 hit overnight.
The December contract ended Thursday’s session 0.84% higher at $1,290.10 an ounce.
Futures were likely to find support at $1,280.30, Thursday’s low and resistance at $1,297.60, the high of June 7.
The precious metal remained supported as tensions escalated between Washington and Pyongyang after U.S. President Donald Trump warned the peninsula on Thursday against attacking Guam or U.S. allies.
North Korea's state media had earlier said that Pyongyang will develop a plan by mid-August to launch intermediate-range missiles at the U.S. territory of Guam.
In an attempt to dial down the aggressive rhetoric, US Defence Secretary James Mattis said war would be "catastrophic" and that diplomacy was gaining results.
Meanwhile, market participants were eyeing an upcoming report on U.S. consumer price inflation, due later on Friday, after the U.S. Commerce Department said on Thursday that producer price inflation and its core reading both unexpectedly declined last month.
The U.S. Department of Labor separately reported that initial jobless claims increased unexpectedly in the week ending August 5.
The reports came after a series of upbeat U.S. employment reports had fueled expectations the Federal Reserve will stick to its plans for a third interest rate hike this year.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was steady at 93.31.
Gold is sensitive to moves higher in both U.S. rates and the dollar. A weaker dollar makes gold less expensive for holders of foreign currency, while a rise in U.S. rates lifts the opportunity cost of holding non-yielding assets such as bullion.
Elsewhere in metals trading, silver futures for September delivery slipped 0.26% to $17.021 a troy ounce, while copper futures for September delivery dropped 0.79% to $2.879 a pound.
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