Gold prices on Monday held around their highest in nearly seven weeks as tensions on the Korean peninsula boosted safe-haven demand for the metal and as the US dollar hovered close to multi-month lows. The United States flew two supersonic B-1B bombers over the Korean peninsula in a show of force on Sunday and the US ambassador to the United Nations said China, Japan and South Korea needed to do more after Pyongyang's latest missile tests.
Spot gold hit its highest since June 14 at $1,270.98 in early trade, but was down 0.1 percent at $1,267.93 per ounce as of 0656 GMT. It gained about 1.1 percent last week in its third consecutive weekly gain. US gold futures for August delivery fell 0.1 percent to $1,267.60 per ounce.
"I think (the market) is cautious about the situation in North Korea and investors tend to go long on gold (at times like these)," said Yuichi Ikemizu, Tokyo branch manager at ICBC Standard Bank. "I think gold will stay firm this week." "Due to the ongoing summer holidays (in Asia), markets are expected to be thin and quiet," said ICBC Standard Bank's Ikemizu. Spot gold may break resistance at $1,271 per ounce and rise towards the next resistance level at $1,277, driven by a strong wave C, according to Reuters technical analyst Wang Tao.
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