Published: Mon, August 14, 2017
Markets | By Erika Turner

Gold Price Reacts to Trump's North Korea Comments

Gold Price Reacts to Trump's North Korea Comments

Rising geopolitical tensions were heightened further when U.S. President Donald Trump warned Pyongyang it should be "very, very nervous" if it even thinks about attacking the United States or its allies, after Pyongyang said it was making plans to fire missiles over Japan to land near the U.S. Pacific territory of Guam. Thursday's producer-price index came out tepid, analysts said. The Nasdaq composite lost 76 points, or 1.2 percent, to 6,275.

"We've had some competing forces play out over the past 12 hours - the USA dollar was stronger off economic data, but that was quickly reversed with President Trump's comments about North Korea earlier today (Wednesday)", said ANZ analyst Daniel Hynes.

European stock markets fell further in opening trade on Friday on intensifying fears over North Korea, dealers said.

Overnight, MSCI's broadest index of Asia-Pacific shares outside Japan had skidded 1.55 percent, its biggest one-day loss since mid-December, to leave it down 2.5 percent for the week. "Whether it is a credit crunch in China, policy error from the Fed, or fear of an over-valued USA stock market, there are many reasons to maintain a balanced multi-asset portfolio that has exposure to defensive asset classes and currencies".

And in bond markets, 10-year U.S. Treasuries and Germany's ultra-safe government bonds, known as Bunds, were trading at their highest prices since June.

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. Hong Kong's Hang Seng Index fell 1.22%.

The commodity touched over $1,284.40 an ounce on Wednesday, which marked the highest intraday price in nearly two months. When the rhetoric between the two leaders heated up, investors were scurrying for safe haven currencies, including the Yen and the Swiss Franc, which surged about 1.1% on Wednesday.

Jittery stock markets fall amid global tension over North Korea
The comments follow reports that the North has mastered a technology needed to strike the United States with a nuclear missile. Stocks are opening lower on Wall Street as investors find little to like in the latest batch of corporate earnings .

Declining issues outnumbered advancing ones on the NYSE by a 2.29-to-1 ratio; on Nasdaq, a 2.47-to-1 ratio favored decliners.

When Japanese traders get back to their desks Monday, stocks will need to catch up with Friday's regional weakness and the yen's recent gains against the dollar, up 1.5% on the week. Weak earnings from companies such as Macy's and Snap, also contributed.

USA producer prices Thursday disappointed, as traders await consumer price inflation figures later Friday.

Oil prices rose before a report expected to show US crude stocks fell for a sixth week.

Economic data showed USA producer prices unexpectedly fell in July, recording their biggest drop in almost a year, while separate figures showed the number of Americans filing for unemployment benefits unexpectedly rose last week. The euro edged down to $1.1726 from $1.1751.

USA crude fell 0.41 percent to $48.39 per barrel and Brent was last at $51.68, down 0.42 percent on the day.

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