North Korea worries rattle Wall Street

Thursday, 07 Sep, 2017

For now, though the focus remains firmly on North Korea and whether they will launch another ballistic missile, and how this may impact the markets. The yen is often seen as the Forex "safe haven", and has climbed in times of geopolitical tension.

Gold prices tested the resistance area which is a crucial technical level at $1349. The euro was at $1.1879-1879, down from $1.1898-1902, and at ¥130.01-02, down from ¥130.27-27.

Gold, another asset sought in troubled times, was up 0.1 percent to $1,339 an ounce after touching $1,344 on Tuesday, its highest since September 2016.

NORTH KOREA: South Korean warships conducted live-fire exercises at sea following USA warnings of a "massive military response" after North Korea's biggest nuclear test to date.

Gold prices find another support as White House and lawmakers reached a deal to extend the deadline on the federal government's debt ceiling on Wednesday and NY stocks recouped some of their losses from the previous session.

"This acquisition adds tremendous capabilities to our aerospace businesses and strengthens our complementary offerings of technologically advanced aerospace systems", said United Technologies Chairman and CEO Greg Hayes. A short-term pullback at this juncture wouldn't be a surprise. I'd rather own gold, or the Canadian dollar.

First, let's look at gold's 2.5% rally last week... China Construction Bank (CCB) and Industrial and Commercial Bank of China (ICBC) declined 1% each in Hong Kong.

Admittedly, precious metals and stock indices are two different animals with the former being supported additionally by a weaker dollar so far this year. Shares in Rockwell rose 1%.

Wall Street gained modestly on Friday as a tepid report kept expectations muted for another interest rate hike this year, while investors kicked off a typically dour month for stocks on a positive note.

Most recently, this range was decisively broken to the upside when the price of gold breached the key $1300 resistance level in late August, and has since continued to rise towards its next major target around the $1350 resistance level. The DXY briefly dropped 30 points from 92.52 to 92.22 that morning, which pushed gold higher. It closed down 0.1% amid weakness in export and financial stocks. With that, the metal also posted a weekly gain of 2.5%. That was still below a more than 2-1/2-year high of $1.2069 touched last week. Although the Trump administration is working with South Korea to formulate a tougher yet measured response, it's possible that the DPRK could continue to test missiles and other weapons with relative impunity as it progresses toward becoming a nuclear threat. The test has dragged the Dow Jones 0.8% lower today while investors moved their money into gold as a hedge against volatility.

Sterling reversed some of its earlier losses against the greenback, to last trade at $1.2954.

"We see no panic in the market just as yet, it feels like it is the calm before the storm and investors are being somewhat cautious", said Peter Cardillo, chief market economist at First Standard Financial in NY.