Gold rallies to highest level this year

Gold rallied to the highest level this year after North Korea fired a ballistic missile over Japan, boosting demand for havens amid escalating tensions between Pyongyang and the US and its allies.

Bullion for immediate delivery gained as much as 0.9 per cent to $1,322.41 an ounce, the highest intraday price since Nov. 9, and traded at $1,317.67 at 7:04 a.m in London.

Gold has surged 15 per cent this year, rising every month apart from June, as investors weigh the possibility of conflict in Asia, with Kim Jong Un’s regime pushing on with missile tests and U.S. President Donald Trump vowing a stern response. The precious metal has also climbed as the Federal Reserve is expected to go slow on further interest rate increases, weakening the dollar.

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“Assuming things don’t escalate from here, and we hope that they don’t, we wouldn’t be surprised to see gold give a few dollars up in the coming hours or days,” said Jordan Eliseo, Sydney-based chief economist at trader and refiner Australian Bullion Co.

Still, investors will watch to gauge whether bullion can remain above the $1,300 level, and that “number, instead of being something of a ceiling, can become something of a floor,” said Eliseo.

Bloomberg