Investors rush to gold following rising North Korea tensions

Cornelia Mascio
Agosto 12, 2017

U.S. President Donald Trump on Thursday warned Pyongyang again, saying his previous promise to unleash "fire and fury" may not have been strong enough after North Korea responded with a threat to fire missiles over Japan to land near the U.S. Pacific territory of Guam.

The Dow Jones Industrial Average rose 14.31 points, or 0.07 per cent, to end at 21,858.32, the S&P 500 gained 3.11 points, or 0.13 per cent, to 2,441.32 and the Nasdaq Composite added 39.68 points, or 0.64 per cent, to 6,256.56.

The utilities index, often seen as a bond proxy because of its companies' slow reliable growth and high dividends, was the only S&P sector that ended the day up, showing a 0.25 percent gain.

A Labour Department report showed its producer price index posted a surprise drop in July, down 0.1 percent for the largest slide in nearly a year.

The Straits Times Index sank 1.31 per cent or 43.52 points to 3,279.72, down 1.4 per cent for the week.

Tomoaki Fujii, head of investment research at Akatsuki Securities in Tokyo, said: "The sell-off caused by geopolitical tensions on North Korea will likely be short-lived as long as both Trump and Kim Jong Un keep making feints against each other and neither takes military action". Germany's DAX fared better, trading only 0.2 percent lower at 11,989. The yield on the 10-year Treasury note held steady at 2.26 percent.

Energy stocks retreated 0.5 percent, despite higher oil prices.

The price of gold also surged for the second day in a row as the December bullion contract advanced $10.80 U.S.to $1,290.10 U.S.an ounce.

"Gold, of course, is already a core asset class for central banks, the super-rich and what are classified as 'the global poor.' Should the North Korea situation develop it may just prove to be the catalyst to push the institutional world to commit flows back to this asset class on a sustained basis".

"The market is interpreting it as lowering the odds of the Fed raising rates in December", said Keith Lerner, chief market strategist at SunTrust Advisory Services in Atlanta.

Nevsun Resources Ltd offset some of the material group's gains, plunging 18.4 percent to C$2.685 after the company reported disappointing quarterly results.

OIL: Benchmark U.S. crude fell 35 cents to $49.04 a barrel on the New York Mercantile Exchange.

"The escalation of the geopolitical situation between the USA and North Korea is beginning to rattle investors' nerves as was witnessed in the VIX index yesterday", said Peter Cardillo, chief market economist at First Standard Financial. The September copper contract was down two cents to US$2.91 a pound.

CURRENCIES: The euro slipped 0.1 percent to $1.1176 while the dollar was steady at 109.20 yen.

Ongoing global glut concerns lingered in oil markets despite a bigger-than-expected draw in US crude inventories, leaving prices volatile.

Altre relazioniGrafFiotech

Discuti questo articolo

Segui i nostri GIORNALE