Gold Prices Are Spiking Because People Are Freaked Out About Nuclear War

Aug 09, 2017

Gold climbed to the highest since mid-June, pushing up mining-company shares amid military tensions between the U.S. and North Korea.

Equities slid and the Swiss franc and some developed-market government bonds advanced as President Donald Trump threatened North Korea with “fire and fury” following a series of missile tests by the communist regime, boosting demand for haven assets. Gold also climbed after Indian imports of the metal were said to have doubled.

The U.S. North-Korea tensions add to investor angst that has helped push up gold more than 10 percent this year, even with equities hitting records and the Federal Reserve keen to shrink its balance sheet. Should geopolitical tensions intensify, gold is likely to be in demand as a safe-haven, according to analysts at Commerzbank AG.

“The threat has escalated and investors are rushing from equities back into precious metals for safety,” Phil Streible, senior market strategist at RJO Futures in Chicago, said in a telephone interview. “It seems the U.S. is one step closer to engaging in military conflict with North Korea.”

Gold futures for December delivery climbed 1.3 percent to $1,278.50 an ounce at 9:02 a.m. on the Comex in New York. Prices earlier rose to $1,282.40 per ounce, the highest since June 14.

An index of 15 gold miners tracked by Bloomberg Intelligence climbed 1.1 percent, led by Toronto-based Yamana Gold Inc. Randgold Resources Ltd. and Barrick Gold Corp. were among the best performers, each gaining more than 1.4 percent.

For more on U.S., North Korean relations, click here.

In India, the world’s second-largest buyer of gold, July imports rose after the arrival of some delayed shipments that were booked ahead of the implementation of a new national goods and services tax, according to a person familiar with the information.

Inbound purchases rose to 53.4 metric tons last month from 22 tons a year earlierDown from 72 tons in June Total imports during January to July jumped more than 2 1/2 times to 625.5 tons, according to data compiled by Bloomberg Demand is expected to slow in the second half of 2017 as market transitions, World Gold Council said last week

Silver futures for September delivery on the Comex rose 2.5 percent, heading for the biggest gain for a most-active contract since January. Platinum advanced on the Nymex, while palladium declined

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