Thursday, 19 October, 2017

Gold steady near 2-month highs on N. Korea tensions

FOREX-Swiss franc posts biggest daily rise in 2-1/2 years on carry trade unwinds Gold seen topping $US1350 an ounce on US, North Korea tensions
Nellie Chapman | 13 August, 2017, 14:14

Markets are now awaiting United States consumer price data for July, due later today. Reuters data show a 28-percent chance for a hike after the Fed's December meeting.

Trump's words were in response to North Korea threatening to attack US territory Guam. He issued a new warning to Pyongyang, tweeting: "Military solutions are now fully in place, locked and loaded, should North Korea act unwisely".

"When it comes to assessing political matters (especially global geopolitics like the North Korea matter), we are very humble", Mr Dalio wrote.

"If the USA and South Korea carry out strikes and try to overthrow the North Korean regime and change the political pattern of the Korean Peninsula, China will prevent them from doing so", the editorial's authors said.

U.S. gold futures gained 0.2% to $1,292.70.

German bond yields fell, gold and the Japanese yen surged and the leveraged bets on higher yielding currencies such as the Australian dollar took a beating.

Australian shares were down 1.5 percent, set for a weekly loss of 0.8 percent. Japan was closed on a public holiday.

Investors are paring positions on speculation that equities, recently at multi-year highs amid record-low volatility, may tumble further as tensions escalate.

The benchmark US yield on Thursday was just above 2.2 percent, at its lowest level since late June, as investors bought up Treasuries, a classic safe harbor.

Japan is the world's biggest creditor country and there is an assumption that investors there will repatriate funds in a crisis. Platinum also moved up 0.8% to $979.85, while palladium moved up a percentage point to $900.30.

The dollar index, which tracks the greenback against a basket of six major rivals, was almost flat on the day at 93.646, remaining above last week's 15-month low of 92.548.

"Risk-off sentiment dominates Asian markets into the end of the week with President Donald Trump's words still sending shockwaves into the markets", said Jingyi Pan, market strategist at online trader IG. The Russell 2000 index gave up 1.7 percent to 1,372.54.

The yield on the benchmark 10-year U.S. Treasury note fell to 2.255 percent from its U.S. close of 2.282 percent on Tuesday.

"Yuan is expected to remain relatively steady or strong compared to regional peers", Scotiabank said in a note on Thursday. It soared over 2 percent in the previous two sessions, and is set for a weekly gain of 2.25 percent. The contract fell 97 cents, or 2 percent, to close at $48.59 a barrel on Thursday.

The market's backstop safety asset, gold, edged up to its latest two-month high of $1,288 an ounce.

The Korea Gold Exchange, a local trader, said the average daily sales of 100-gram gold bars reached 250 units since Wednesday, rising sharply from 50 units on average.