FxWirePro: Gold breaks key resistance line; rise to $1360 likely

Cornelia Mascio
Agosto 13, 2017

The gold price rose late Tuesday (August 8) after US President Donald Trump warned that North Korea's threats to the US "will be met with fire and fury".

Trump was responding to North Korea's claim it was completing plans to fire four intermediate-range missiles over Japan to land near the U.S. Pacific territory of Guam.

At 9:34 a.m. ET (1334 GMT), the Dow Jones Industrial Average was up 54.06 points, or 0.25 percent, at 21,898.07, the S&P 500 was up 5.23 points, or 0.21 percent, at 2,443.44.

On the US economic front, a report released by the Labor Department showed a modest uptick in consumer prices in the U.S.in the month of July.

The greenback also came under pressure after New York Federal Reserve President William Dudley cautioned it would "take some time" for United States inflation to reach the bank's two percent target, the latest warning price pressures remain muted.

Markets also await speeches by Fed officials Robert Kaplan and Neel Kashkari for further direction. They have soared over 2 percent in the previous two sessions, and are set for a weekly gain of 2.25 percent.

In terms of forex market movements, the United States currency lost significant ground relative to majors including the yen, sterling and the euro - most notably the latter one - as the news on inflation went public.

United States gold futures gained 0.2% to $1,292.70.

Shares of U.S. department stores Kohl's and Macy's were weak after their results.

Graphics chip maker Nvidia (NVDA) is also likely to come under pressure after reporting better than expected second quarter earnings but revenue from its data center and automotive businesses that missed estimates. WTI oil prices are trading lower by 0.5 per cent at $48.34 a barrel, while MCX oil prices are trading lower by 0.6 percent at Rs 3,108 a barrel.

J.C. Penney slumped 16.56 percent to a record low after the retailer reported a bigger-than-expected quarterly loss. Odds of a Fed rate rise during the December meeting now stand at around 40% according to the CME Group's 30-day Fed Fund futures prices.

Benchmark U.S. crude added 39 cents to settle at $49.56 a barrel on the New York Mercantile Exchange.

The Swiss franc last stood at 1.1332 per euro, down slightly on the day. The yield on the 10-year Treasury note fell to 2.22 percent from 2.26 percent late Tuesday.

The UK's FTSE 100 index fell 66.36 points, or 0.9%, to 7,323.58 in early trade, having dropped 1.4% on Thursday. Tokyo's Nikkei 225 share index closed down 1.3% at its lowest since June 1 as the strong yen hit exporters, while South Korea's KOSPI index fell 1.1% to seven-week lows. The NYSE Arca Biotechnology Index plunged by 3.4% to its lowest closing level in well over a month. Other regional East Asian financial markets would also be vulnerable, particularly Japanese financial markets, with risks of disruption to Northeast Asian regional trade and investment flows and manufacturing supply chains.

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