If you’re thinking about getting into gold investing, today’s news might be just the push you needed to get started. On Wednesday, gold futures reached their sharpest daily rise since mid-May, amid tension between the United States and North Korea.
For December delivery, gold increased $16.70 (1.3%) to $1,279.30 an ounce. This is significant as it is the biggest single-session increase since May 17 when the precious metal added $22.30 (1.8%).
For September silver, this tacked on 47.4 cents (2.9%) to $16.863 an ounce, which represents its sharpest daily increase since September 21 of last year. Additionally, according to FactSet data, it has put the precious metal at an almost two-month high.
For the most part, North Korea’s recent threat to lob a missile at Guam has helped to heighten haven buying in global financial markets. “It’s really gold behaving in its traditional manner as a safe-haven asset,” said Ross Norman, CEO of Sharps Pixley Ltd.
However, in order for Norman to be 100% convinced that gold has entered into a more significant bullish phase, he says the commodity will need to take a run above $1,295 an ounce. “I’m always suspicious of moves like this because the issues that cause them are rarely sustained,” he said. Keep in mind Norman is referring to the ongoing political tensions between North Korea and the U.S. in this statement.
Gains for both gold and silver corresponded with a broader flight to so-called haven assets. This, for instance, is evidenced by United States Treasury yields being pushed down to an intraday low of 2.215%.
Importantly, the United States dollar – which is measured by the ICE U.S. Dollar Index – was trading fairly flat at 93.63. The dollar gauge watches the buck’s value against half-dozen competitors. For those who don’t know, a flat greenback can help to add bullish momentum for commodities connected to the currency, thus making them less expensive to those using weaker currencies to buy gold.
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