Published: Fri, August 11, 2017
Economy | By Annette Adams

Gold up for fourth straight session on North Korea tensions

Gold up for fourth straight session on North Korea tensions

Following Trump's remarks, North Korea on Wednesday said it was "carefully examining" plans for a missile attack on the U.S. Pacific territory of Guam, which is home to a large U.S. military base.

Overnight the Dow Jones Industrial Average on Wall Street fell 0.2% to 22,085.34, ending a winning streak of 10-consecutive record high closes.

The last time the S&P closed down more than 1 percent was May 17 when it fell 1.8 percent.

Currency traders consolidated positions in the Japanese yen and Swiss franc, and nudged up the dollar index by unwinding some of the recent big bets on the euro.

The gap between the 2-year yield and the 10-year yield narrowed by 2.8 basis points to a spread of 65 basis points, its narrowest since July 24, as longer-dated bonds outperformed.

Selling was broad. Declining issues outnumbered advancing ones on the NYSE 6-to-1; on Nasdaq, a 3.60-to-1 ratio favored decliners.

Markets have tended to shrug off North Korea's sabre-rattling in the past, dismissing it as bluster, but the latest tensions have added to jitters.

OPEC boosted its estimates for crude demand in each of the next two years by 100,000 barrels per day while trimming its estimates for how much oil its rivals will bring to market. Markets will also be sensitive to shifting expectations in Fed monetary policy, particularly if tomorrow's CPI figures fail to reflect the pick-up in inflation now forecast. Markets will also be watching comments from Federal Reserve Bank of New York President and Federal Open Market Committee number-two William Dudley ahead of United States consumer price index (CPI) inflation data tomorrow.

The market's main backstop in times of strain, gold, hit a two-month high of $1,282 an ounce amid the nervousness.

Chemicals group Brenntag led fallers, down 5.5 percent after second quarter results undershot expectations. Brent crude, used to price global oils, gained 16 cents to $52.30 in London.

The healthcare sector outperformed thanks to strong gains from the world's top maker of diabetes drugs, Novo Nordisk, up 3.9 percent after beating second-quarter profit forecasts.

Shares of Blue Apron Holdings fell $1.10, or 18%, to $5.14 - its lowest close ever - after the company cited rising costs and increasing competition from other food, grocery and meal-kit delivery services in its first quarterly earnings report since going public in late June. The euro slid to $1.1742 from $1.1752.

The pan-European FTSEurofirst 300 index .FTEU3 lost 0.75 percent and MSCI's gauge of stocks across the globe .MIWD00000PUS shed 0.33 percent. The dollar was down 1.2 percent at 0.9627 Swiss francs, while an ounce of gold was 1 percent higher at $1,275. The Nasdaq composite fell 35 points, or 0.5 percent, to 6,336.

CURRENCIES: The dollar slipped to 110.00 yen from 110.06 late Wednesday in Asia.

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