Gold dipped slightly in Asia on Wednesday a day after it spiked on a North Korean missile test over Japan with investors poised to react anew to fresh provocations after the United Nations Security Council condemned Pyongyang again for ramping up its weapons programs.
Gold futures for December delivery on the Comex division of the New York Mercantile Exchange eased 0.04% to $1,318.33 a troy ounce.
Overnight, gold prices remained supported despite easing from nearly 11-month highs on Tuesday, as the dollar pared some of its losses but geopolitical uncertainty limited downside momentum.
Gold prices rose more than 1% to a nearly 11-month high of $1,331.18, after North Korea fired a missile that flew over Japan on Monday, triggering a flight-to-safety among investors, lifting demand for safe haven assets like gold.
The rally, however, was short-lived as traders appeared to take profit on the precious metal’s spike to multi-month highs, following a rebound in the dollar amid better-than-expected consumer confidence data.
The Consumer Confidence Index rose in August to 122.9, despite expectations of a decline, The Conference Board announced Tuesday.
Gold is sensitive to moves higher in the dollar. A stronger dollar makes gold more expensive for holders of foreign currency.
Sentiment on gold, however, remains positive as net bullish bets on gold rose to the highest in nine months, according to a report from the Commodity Futures Trading Commission (CFTC) on Friday.
Hedge funds and money managers again raised their net long stance in gold, upping it by 16,795 contracts to 196,331 contracts, the data showed. Meanwhile, a net long stance in silver was raised by 7,150 contracts to 43,678 contracts.