Gold Steadies Near 4-Week Highs After Latest North Korea Missile Test

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Includes: DGL, DGLD, DGP, DGZ, DZZ, GEUR, GHE, GHS, GLD, GLDI, GLDW, GLL, GTU, GYEN, IAU, OUNZ, PHYS, QGLDX, SGOL, UBG, UGL, UGLD
by: Investing.com

Gold prices were little changed near a four-week high in European trade on Monday, as the latest ballistic missile test by North Korea supported safe-haven demand.

Comex gold futures shed 60 cents, or less than 0.1%, to $1,267.47 a troy ounce by 3:00 AM ET (0700 GMT). Meanwhile, spot gold was at $1,267.59.

Prices of the yellow metal ended Friday's session up almost 1%, after touching its strongest since May 1 at $1,269.30.

Also on the Comex, silver futures tacked on 3.2 cents, or about 0.2%, to $17.35 a troy ounce. It rose to $17.38 in overnight trade, a level not seen since April 28.

North Korea fired what appeared to be a short-range ballistic missile on Monday that landed in the sea off its east coast, South Korea's military said.

It was the ninth missile the hermit state has tested this year, as it faces increasing pressure from the U.S. and historical ally China over its missile testing program.

Trading volumes were likely to remain light with U.S. markets closed Monday for Memorial Day while the U.K. is also shuttered for a public holiday.

Global financial markets will focus on the U.S. employment report in the week ahead for further signs of the Federal Reserve's likely rate hike trajectory through the end of the year.

Besides the monthly jobs report, this week's holiday-shortened calendar also features U.S. data on manufacturing and service sector growth, consumer confidence, auto sales, personal spending, core PCE inflation, as well as monthly trade figures.

Futures traders are currently pricing in around an 80% chance of a hike at the Fed's June 13-14 meeting, according to Investing.com’s Fed Rate Monitor Tool.

However, market players are no longer convinced that the Fed will be able to raise rates two more times this year, with odds for a second hike by December currently at about 35%.

The median Fed policymaker forecast is for two more rate increases by year-end. But a recent run of disappointing U.S. economic data combined with signs of deepening political turmoil in the White House raised doubts over the Fed's ability to raise rates as much as it would like before the end of the year.

The precious metal is sensitive to moves in U.S. rates, which lift the opportunity cost of holding non-yielding assets such as bullion. A gradual path to higher rates is seen as less of a threat to gold prices than a swift series of increases.

Elsewhere in metals trading, platinum shed 0.3% to $959.80, while palladium added 0.7% to $792.27 an ounce.

Copper futures lost 1.0 cent to $2.556 a pound.

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