Gold prices near 12-month high
Gold prices jumped to their highest in almost a year as a weaker dollar and escalating tensions between the United States and North Korea, exacerbated with latter’s missile test over the weekend, pushed investors towards safe-haven assets.
On Sunday, North Korea conducted its most powerful nuclear test to date, which it said was of an advanced hydrogen bomb for a long-range missile. The action prompted the threat of a “massive” military response from the United States if it or its allies were put at risk.
As a result of this geopolitical tension, spot gold XAU= hit $1,339.47 on Monday, its highest since September 27, 2016. Back then, another major event, the Brexit vote, benefited the yellow metal.
This quarter, gold prices are up more than 7 per cent and add up to more than 16 per cent for the entire year.
Today’s rally follows that of the Japanese yen and Swiss franc, where investors also tend to take refuge against political and financial turmoil.