Gold prices reversed losses Wednesday as rising tensions between the United States and North Korea precipitated demand for the precious metal.
According to Wall Street Journal (WSJ) report, gold for August delivery rose 0.3 percent to $1,222.30 a troy ounce on the Comex division of the New York Mercantile Exchange. The metal prices were said to have reached a low of $1,216.50 an ounce earlier in the season.
Reports have it that the United States had warned North Korea that it was ready to fight if provoked, as Pyongyang claimed another weapons-development breakthrough following its launch of an intercontinental missile a day earlier.
Again, some investors are perceived to head for gold during political uncertain times, believing that the metal will hold its value better than other assets when market turns rocky.
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It is also noted that gold always struggles to compete with yield bearing investments when interest rates rise, just as investors are especially paying close attention to minutes from the US Federal Reserves monetary policy meeting Wednesday.
“Any sign that the Fed is wobbling in its resolve to deliver a third rate increase this year would hurt the dollar and send gold prices higher,” a New York-based trading executive told WSJ.
For base metals, quotes for September delivery copper were recently down 1.5 percent at $2,615 a pound