Gold hits five-month high after United States missile strike
- Author: Zachary Reyes Apr 07, 2017,
Apr 07, 2017, 16:53
On the Comex division of the New York Mercantile Exchange, gold futures for June delivery were up 0.89% at a five-month high of $1,264.55.
"There is the risk that the fight over Syria will lead to a larger confrontation in which Iran and Russian Federation, and the United States, could get involved, so it could have more serious implications overall", Commodity Discovery Fund founder Willem Middelkoop said.
Spot gold inched down 0.1 percent to $1,253.75 per ounce. U.S. gold futures were up 0.6 per cent at US$1,255.60, after climbing as much as one per cent to US$1,260.80 earlier in the day.
Stocks fell and safe-haven bonds and the yen jumped in Asia on Friday after the missile strike.
Spot gold hit US$1,261.15 on Tuesday, its highest since Feb 27, but has failed to breach a key 200-day moving average of US$1,258.
Gold slipped from one-month highs on Wednesday after failing to break technical resistance at its 200-day moving average for a third time, but appetite for safe-haven assets ahead of a meeting of USA and Chinese leaders limited its losses.
The air strike came during a two-day summit between Trump and Chinese President Xi Jinping which, on Thursday, had a strong focus on trade and North Korea's military program.
Naeem Aslam, chief analyst at Think Markets UK, said gold remains a net beneficiary of the development so far into the trading day.
"My initial thoughts are the new president (Trump) is sending a big message to the Chinese about their willingness to act on North Korea as well with this strike", said Jeffrey Halley, senior market analyst at OANDA.
The continued dovish tone of the U.S. Federal Reserve has also benefited gold prices, as interest rates are expected to remain low compared to forecasts for the remainder of the year.
In other precious metals, spot silver was down 0.4 percent at $18.21 an ounce, having touched a one-month high of $18.41 in the previous session. If gold were continue to trade at current levels, it could notch the highest close since November 10, when it finished at $1,266.40 an ounce, according to FactSet.
Platinum fell 0.7 per cent to US$953, while palladium rose 0.5 per cent to US$808.60.
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