- A pick-up in tensions between the USA and North Korea prompted investors to seek out haven assets, giving some lift to gold prices this morning.
- “Today our machines seemed especially active recording their first trades on the market opening … as North Korea threatened to test a bomb in the Pacific Ocean,” John Browning, md with Bands financial said.
- The threat came hours after US president Donald Trump announced new financial sanctions targeting North Korea.
- Trump extended the scope of sanctions to individuals that provide goods, services or technology to North Korea.
- He also said the Chinese central bank has told other banks in the country to stop doing business with North Korea with immediate effect.
- Earlier this week in an address to the United Nations, Trump had said that the USA was ready to "totally destroy" North Korea if it was forced to defend its allies, a warning seen as unprecedented for a US president delivering an address to the world's leaders and top diplomats.
- Providing further support to gold prices this morning was a weaker dollar.
- The dollar index was recently down 0.14% at 92.05 – this after rebounding to as high as 92.66 on Thursday following hawkish comments from the US Federal Reserve that it would start reducing its balance sheet from October as well as hinting at another US interest rates rise this year.
- In the other precious metals, the spot silver price up $0.065 to $17.030-17.050 per oz.
- Platinum increased $6.50 to $940.0-945.0 per oz, and palladium climbed $6 to $914.0-919.0 per oz.
- On the Shanghai Futures Exchange, gold for December delivery was recently at 277.60 yuan ($42.14) per gram, while the December silver was at 3,868 yuan per kg.
Currency moves and data releases
- The dollar index was recently down 0.14% at 92.05.
- In other commodities, the Brent crude oil spot price was down 0.16% to $56.34 per barrel, and the Texas light sweet crude oil spot price rose 0.08% to $50.59.
- In equities, the Shanghai Composite dipped 0.35% to 3,345.97.
- In US data on Thursday, the house price index in July ticked up by 0.2%, below the forecast of a 0.4% rise. Weekly unemployment claims came in at 259,000, an improvement over the previous figure of 284,000. Finally, the Philly Fed manufacturing index in September was 23.8, better than the expectations of 17.3.
- Today, we have a host of flash manufacturing and services PMI data out across Europe and the USA.
- In addition, UK prime minister Theresa May is speaking about Britain's post-Brexit relationship with the EU later.