Investor angst over North Korean leader Kim Jong-un is helping gold get its groove back.
Bullion rose, trimming a weekly loss, after Russia’s state news service quoted Russian Legislator Anton Morozov as saying North Korean officials are planning a new test soon of a missile capable of reaching the US West Coast.
Geopolitical tensions are reviving haven demand for the precious metal after earlier economic data bolstered the case for higher interest rates in the US, hurting non-interest bearing gold.
Friday’s gains are still not enough to reverse the metal’s fourth weekly loss that marks the longest such streak this year.
While political uncertainty persists, traders are still pricing a 79 percent chance that the US Federal Reserve will boost borrowing costs by December, up from 29 percent a month earlier, according to Fed funds futures data compiled by Bloomberg.
“Saber-rattling helps gold and brings the worriers back,” RBC Wealth Management managing director George Gero said in a telephone interview. “It’s a long-term uncertainty about what, if anything, can happen with North Korea going forward.”
Gold for immediate delivery gained 0.4 percent to US$1,273.05 an ounce at 2:25pm in New York, after sliding to the lowest since Aug. 9. The metal slipped 0.9 percent this week.
Prices slid earlier on Friday when the US Department of Labor report showed wage gains in the US accelerating.
Gold futures for December delivery settled at US$1,278.90 on the Comex in New York. The contract is down 0.5 percent from last week’s US$1,284.80.
Mozorov told RIA Novosti that North Korean officials gave mathematical calculations that, in their view, showed that they would be able to hit the West Coast of the US with their missile.
North Korea is “preparing for nuclear war,” Alexei Didenko, another member of the delegation, told Bloomberg News in a telephone interview. “They’ve been ready for it for a long time.”
Other commodities:
Spot silver advanced 0.9 percent to US$16.7486 an ounce, rebounding from the lowest in almost two months.
Platinum fell to the lowest since July as palladium slipped.
Copper declined less than 0.05 percent to US$3.05 a pound.
December benchmark wheat futures dropped 1.1 percent in the week ended on Friday to US$4.435 a bushel in Chicago.
Canada’s output of durum, the kind of wheat used to make pasta, is poised to shrink 45 percent to a six-year low, the government has forecast.
Farmers planted less of the high-protein grain and hot, dry weather cut yields. Even with the dramatic fall, prices are down about 30 percent from last year amid tepid consumption.
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