Gold buoyed by North Korea tensions, USA inflation data

Paterniano Del Favero
Agosto 12, 2017

"The North Korea situation is still unstable and investors are controlling risk and taking profit after recent gains", said Sam Chi Yung, a Hong Kong-based strategist at South China Financial Holdings.

Major European markets sank in early trade Thursday after the Dow recorded its second straight negative close Wednesday, although the dollar firmed against the pound and euro ahead of United States inflation data Friday.

The UK's FTSE 100 index fell 66.36 points, or 0.9%, to 7,323.58 in early trade, having dropped 1.4% on Thursday.

The Dow and S&P 500 inched higher on the day but they both posted their largest weekly percentage drops since late March.

But in the US, Wall Street edged higher as investors waded back into the market following a three-day sell-off. But the market quickly bounced back, led by numerous tech stocks that were sinking on Thursday.

Nervous markets: Global markets are heading for a third consecutive day of losses amid growing tensions between North Korea and the U.S.

"Tensions are high. Markets have taken a little notice", said Greg McKenna, an analyst at AxiTrader.

The one-upmanship in the "war of words" between Donald Trump and Kim Jong-un came to accelerate the fall of the stock market.

Speculative positions in USA gold futures remain subdued, said UBS strategist Joni Teves.

The New York stock Exchange has chained three consecutive sessions of decline in response in a face-to-face meetings between the United States and North Korea.

Thursday's selling in the US extended to global markets Friday. "Hard to assess political risk is now intruding on this scenario".

The Japanese yen hit an eight-week high against the USA dollar, while spot gold also reached a two-month high.

Gold got a boost from Dalio, the mercurial founder of the world's biggest hedge fund, Bridgewater Associates.

The dollar held steady at 110.02 yen JPY= , having pulled up from Wednesday's low of 109.56 yen, its lowest level since June 15. They were at 2.201 percent on Friday. The Japanese currency rallied broadly against most major currencies.

The euro eased 0.1 per cent to $1.1766, staying below a high of around $1.1910 set last week, the euro's strongest level in 2-1/2 years.

The 30-year bond last rose 6/32 in price to yield 2.7847 percent, from 2.794 percent late on Thursday.

OIL: Benchmark U.S. crude lost 24 cents to $48.37 per barrel on the on the New York Mercantile Exchange while Brent crude, used to price global oils, declined 20 cents to $51.70 per barrel in London.

In the first four days of the week, the Standard & Poor's 500 index swung from marking its latest record high to posting its biggest single-day drop in almost three months.

Emerging market stocks lost 1.20 percent.

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