Gold prices surges on early Wednesday trade amid tensions between the U.S. and North Korea. This is after North Korea responded to President Donald Trump’s warning and threatening that they’ll strike on Guam, U.S.’ territory.
Spot gold climbed 0.3 percent to $1,264.50 an ounce, while U.S. gold futures for December delivery went up 0.6 percent to $1,270.40 an ounce.
North Korea stated that they were “carefully examining” plans for a missile strike on Gam, U.S.’ Pacific territory. This were just hours after Trump released a statement that North Korea would face “fire and fury” if it threatens the United States.
“I think (the North Korea situation) is going to continue to provide a little bit of support, but not enough to push prices significantly higher from here,” said ANZ analyst Daniel Hynes.
Asian stocks and U.S. stock futures declined while U.S. treasuries, gold and the yen climbed in Wednesday’s early trading despite the political tension.
Gold prices were dragged on Tuesday by the Labor Department’s stronger-than-expected U.S. jobs data to its lowest since July 26. It was at $1,251.01 per ounce.
Geopolitical risks such as this can boost demands for safe haven assets such as gold.
Investors are also on the lookout on the U.S. inflation data that is due later this week for clues on when the US Federal Reserve would begin reducing its $4.2 trillion bond portfolio.
In other precious metals, silver went up 0.4 percent to $16.48 an ounce while Platinum advanced 0.7 percent to $973.40 an ounce.
Palladium slumped 0.2 percent to $895.30 an ounce.