Gold slumped on Wednesday, August 30, pressured by gains in the dollar amid perception of a brief lull in tensions over North Korea, but prices of the yellow metal remained supported as safe-haven demand was buoyed by expectations that geopolitical risks could persist.
“The dollar strength is taking some shine off the yellow metal,” said Naeem Aslam, chief market analyst, Think Markets.The $1,300 mark for gold is a line in the sand.”
Spot gold was down 0.1 per cent at $1,307.60 per ounce as of 0701 GMT. It hit an over nine-month peak on Tuesday at $1,325.94.
US gold futures slipped 0.4 per cent to $1,313.20.
The dollar rebounded from a 2.5 year low on Wednesday, and Asian stocks took cue from Wall Street’s stronger close, as concerns about North Korea’s firing of a missile over Japan ebbed.
North Korea said on Wednesday it had conducted a test of an intermediate-range ballistic missile (IRBM) to counter US and South Korean military drills.
The United States will not allow North Korea’s lawlessness to continue and it is time for Pyongyang to recognise the “danger they are putting themselves in” as the world is united against them, US Ambassador to the United Nations Nikki Haley said on Tuesday.
“A lot of people are still seeing gold as a safe haven because we have not heard much in terms of reactions of the different countries to North Korea’s action,” said Brian Lan, managing director at dealer GoldSilver Central in Singapore.
Geopolitical risks can boost demand for safe-haven assets such as gold, considered a good store of value during volatility in other markets, Economic Times reports.
