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

Traders work on the floor of the NYSE in New York

The rhetoric, which began late Tuesday and continued into Friday, cracked the calm that has enveloped the market for months and interrupted stocks' march higher.

The local market followed the lead of Wall Street and Europe's retreat from the escalating tensions between the USA and North Korea with the ASX 200 and All Ordinaries both falling around 1.2 per cent.

MSCI's broadest index of Asia-Pacific shares outside Japan dropped 0.6 percent in its third session of declines, heading for a 1.5 percent drop for the week.

South Korea's KOSPI fell 1.7 per cent on Friday to its lowest since May 24, but its losses for the week were a relatively modest 3.2 per cent. The statement has dominated the headlines, and is one of the main drivers in the markets.

Gold held steady at two-month high with spot gold rising 0.1 percent to $1,287.83 per ounce, putting the precious metal on pace for its biggest weekly gains since April.

In a note to investors, Paul Christopher, head global market strategist, and Tracie McMillion, head of global asset allocation, suggest, "the threat of a nuclear weapon is certainly more serious than previous threats, but that threat also may increase the probability of a diplomatic solution".

The Russian dollar-traded index RTS was down 1.49 percent, and ruble-traded MICEX fell 1.29 percent by midday. Australia's S&P/ASX 200 dropped 1.2 percent, while Japan was closed on a public holiday.

Hong Kong shed more than one percent and Shanghai also closed lower, while Seoul shares continued their sell-off after slumping Wednesday, with the won again softening.

The market was waiting for USA consumer inflation data on Friday that would offer more clues about future Fed decisions. The Hang Seng index ended down 1.1% at 27444.00 points.

The Canadian dollar was trading at 78.64 cents United States, down from an average price of 78.71 cents U.S. on Wednesday.

Market participants are also nervous about escalating tensions between the USA and North Korea.

"It looks like it was used as a good excuse to adjust positions", he said, referring to the latest flare-up of tensions between the United States and North Korea.

The technology sector .SPLRCT was the S&P's biggest drag with a 2.2 percent drop.

The euro eased 0.1 per cent to $1.1766, staying below a high of around $1.1910 set last week, the euro's strongest level in 2-1/2 years.

The yield on the 10-year Treasury bond fell to 2.2% and is approaching its lowest level of the year.

However, markets remained focused on geopolitical crisis, as angry threats from Washington and Pyongyang stoke fears of a catastrophic miscalculation with global consequences. Brent crude was up 80 cents at $53.50 a barrel and USA crude was up 60 cents and back up to $50.

Related:

Comments


Other news