Gold futures were dragged away from a two-month high it notched on the previous session as it was supported by Japanese yen’s depreciation against the U.S. dollar due to geopolitical tensions last week.
U.S. President Donald Trump said a new threat to the hermit state last Friday, saying that the military in the United States were locked and loaded. This is after Pyongyang accused Trump of pushing the Korean Peninsula to the edge of a nuclear war.
The greenback was a shade higher versus the Japanese yen on Monday’s session. The heightened tension between North Korean and United States somehow made the dollar escape a 4-month low as investors perceive this as a key to the near-term outlook.
On gold prices, U.S. gold futures dropped more than 0.13 percent to trade at $1,292.3 an ounce and spot gold edged down by 0.2 percent to finish at $1,286.10 an ounce. Spot gold reached its best level since June 7 at $1,291.86 per ounce last Friday. It is already given that a stronger dollar is not good for the yellow metal because it will make the non-yielding bullion expensive for holders outside the U.S., which will further weaken the demand.
There are possibilities that imports of gold in Ghana would rapidly decline this year due to the restrictions on the mining’s that are small scale that heightened output on 2016. However a government official said last Saturday that this would cause a large damage on the environment.
Multi Commodity Exchange (MCX) in India will launch the country’s very first gold options contract next month which gives access to small players in the gold industry.