Published: Sun, August 13, 2017
Economy | By Annette Adams

Gold Surges On Producer Prices, North Korea

Gold Surges On Producer Prices, North Korea

Gold has risen to its highest level in nearly two months, while the Swiss franc has powered against the United States dollar and seen its biggest one-day gain against the euro in more than two and a half years.

The MSCI World index slipped 0.15 percent, extending Thursday's 1.1 percent drop, its biggest one-day slide since May 17.

Two of the equity market's top strategies this year, chasing winners and buying companies with the highest expectations for earnings growth, both stalled in the market rout.

Earlier this week, Trump said the U.S. would unleash "fire and fury" on North Korea if it continued to threaten the U.S. North Korea has announced a detailed plan to launch a salvo of ballistic missiles toward the U.S. Pacific territory of Guam, a major military hub and home to U.S. bombers.

On Thursday, the CBOE Volatility Index, a barometer of expected near-term stock market volatility, closed at its highest since the U.S. presidential election.

LONDON, Aug 11 (Reuters) - The dollar was pinned close to an eight-week low against the yen on Friday as escalating tension over North Korea dominated currency markets thinned out by the summer holidays in Europe and the United States.

"We're still close to the all-time high so that makes people a little nervous too, so they might say now might be the time to take a little bit of money off the table". The Dow slumped 204.69 points or 0.9% to 21,844.01, the Nasdaq plummeted 135.46 points or 2.1% to 6,216.87 and the S&P 500 tumbled 35.81 points or 1.5% to 2,438.21. By the end of the day almost $1 trillion in equity had been lost globally.

An index of 15 gold miners tracked by Bloomberg Intelligence climbed 1.1 percent, led by Toronto-based Yamana Gold Inc.

"The yen is the big story really. The market is interpreting it as lowering the odds of the Fed raising rates in December", said Keith Lerner, chief market strategist at SunTrust Advisory Services in Atlanta.

The Topix index of all first-section issues edged down 0.04 percent, or 0.65 points, to 1,617.25 for a weekly loss of 0.87 percent.

A small rise in a measure of U.S. consumer prices pointed to benign inflation that could make the Federal Reserve cautious about raising interest rates again this year, which would be favorable to equity investors.

Weakness in U.S. Treasury yields may also be supporting the yen, Sweeting said. Yields fall when bond prices rise.

Ongoing global glut concerns lingered in oil markets despite a bigger-than-expected draw in usa crude inventories.

U.S. crude shed 12 cents to $49.05 a barrel, while Brent crude fell 18 cents a barrel at $51.96 a barrel.

Spot gold XAU= was up 0.2 percent at $1,287.91 an ounce by 2:03 p.m. EDT (1803 GMT), and set for its biggest weekly gain since mid-April.

"The tension between the United States and North Korea is still dominating the news and it is looming over the financial markets", said David Madden, market analyst at CMC Markets UK. The price of the precious metal - which is considered a safe haven during periods of uncertainty - advanced Friday, from 3.90 to USA $1294 U.S. $at the Exchange of the commodities of NY.

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