The gold price rose on Friday (August 11), touching a two-month high as geopolitical tensions continued to grow.
The aggressive exchange between the US and North Korea escalated during the week, driving investors away from risk and pushing gold near $1,300 per ounce. Most recently, US President Donald Trump issued a warning saying the US military is “locked and loaded” to deal with North Korea.
“There is a continuation of flight to the safe havens after remarks on Thursday evening from Trump about North Korea,” said Quantitative Commodity Research consultant Peter Fertig. “It’s not very likely that these tensions will ease in the near future so the outlook seems supportive for gold.”
The gold price has also received support from data pointing to weaker US inflation, which could slow the pace of further US Federal Reserve interest rate hikes later this year.
“If you look at the gold price after the CPI (inflation) data, it tells you that the Fed is not going to be in any rush to increase the interest rate this year,” said Naeem Aslam, chief market analyst at Think Markets.
The CPI report also hit the US dollar, which touched a one-week low, boosting gold demand. A softer greenback makes commodities priced in dollars less expensive for buyers using weaker currencies.
As of 1:00 p.m. EST on Friday, the gold price was at $1,287.14. Click here to read more about the gold price performance in Q2 and what’s ahead for the yellow metal.
Looking over to silver, the white metal edged higher on Friday, and was on track to hit a weekly gain of almost 5 percent. As of 1:00 p.m. EST on Friday, the white metal was at $17.08 per ounce. Click here to read more about the silver price performance in Q2.
On the base metals side, copper prices hit a fresh two-year high earlier this week, fueled by forecasts of strong demand in top copper consumer China and a weak dollar. On Friday, LME copper was trading at $6,417.50 a tonne.
Lastly, spot oil headed lower on Friday as reports of a rise in production increased oversupply concerns.
September West Texas Intermediate crude lost 22 cents, or 0.4 percent, to hit $48.35 a barrel on the New York Mercantile Exchange, while Brent crude for October delivery on London’s ICE Futures Exchange lost 22 cents, or 0.4 percent, to reach $51.69 a barrel.
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Securities Disclosure: I, Priscila Barrera, hold no direct investment interest in any company mentioned in this article.