Economia

Gold Price Hits Highest Levels In Two Months

Gold Price Hits Highest Levels In Two Months

The S&P 500 index had its biggest one-day drop in nearly three months on Thursday as investors fled riskier assets, with technology stocks leading the charge, in response to an increasingly aggressive exchange of threats between the United States and North Korea.

Japanese markets were closed for a holiday, but the tense mood dragged Asian shares lower and an MSCI index of stocks across the globe posted its largest weekly drop since the week before Donald Trump won the USA presidential election in November.

The Russell 2000 index of smaller-company stocks picked up 1.69 points, or 0.1 percent, to 1,374.23. Hong Kong's Hang Seng Index plunged by 2%, while South Korea's Kospi Index slumped by 1.7%.

Earlier on Thursday, North Korea revealed a plan to launch ballistic missiles toward a major US military hub in the Pacific.

As for where gold can go from here, Capital Economics says that "until there is some certainty as to how the current geopolitical situation will evolve, gold prices are likely to remain well supported and could even rise above $US1,350 per ounce".

-North Korea tensions as market participants bought the yen as a safe haven.

Global political tensions have seen investors sell off shares as they flee to less risky assets such as the yen and the Swiss franc.

The dollar index, which measures against a basket of currencies, fell 0.05 per cent.

"North Korea will blow over and given the sentiment, we could see a rally back to new highs" by the end of next week, Michael Block, chief market strategist at Rhino Trading Partners, wrote in a report on Friday. Australia's S&P/ASX 200 dropped 1.2 percent, while Japan was closed on a public holiday.

Investors are increasingly nervous: The VIX volatility index, a closely-watched "fear gauge", is up 70% since Tuesday.

News that USA producer prices unexpectedly fell in July earlier helped send the dollar lower.

The market was waiting for USA consumer inflation data on Friday that would offer more clues about future Fed decisions.

Economic data showed USA producer prices unexpectedly fell in July, recording their biggest drop in almost a year, while separate figures showed the number of Americans filing for unemployment benefits unexpectedly rose last week.

"We saw a tentative recovery in risk appetite yesterday from the sell-off inspired by North Korea but I think justifiably that move is fading a little bit today", said Saxo Bank's head of FX strategy John Hardy. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, dipped by 2.3 basis points to 2.189 percent. The price rose 1.3 per cent in the previous session, the biggest gain since mid-May.

The euro eased 0.1 per cent to $1.1766, staying below a high of around $1.1910 set last week, the euro's strongest level in 2-1/2 years. Markets in greater China mirrored the slide in global equities.

US crude rose 0.43 percent to $48.80 per barrel and Brent was last at $52.01, up 0.21 percent on the day.