Gold prices climbed to a one-year high on Tuesday as the US dollar eased and safe-haven buying demand remained robust due to continued concerns over North Korea's nuclear tests. Wall Street stocks fell as US trading reopened for the first time since North Korea's biggest nuclear bomb test yet, and the US dollar and Treasury yields fell.
Spot gold was up 0.6 percent at $1,341.86 an ounce by 3:19 p.m. EDT (1919 GMT), after peaking at $1,344.21, its highest since Sept. 8, 2016. US gold futures ended the session up 1 percent at $1,344.50. South Korea said an agreement with the United States to scrap a weight limit on its warheads would help it to respond to the threat from North Korea after Pyongyang conducted its sixth and largest nuclear test two days ago.
North Korea has been observed moving what appeared to be an intercontinental ballistic missile (ICBM) towards its west coast, South Korea's Asia Business Daily reported. "Gold is still in demand as a safe haven," Commerzbank said in a note. "It is thought that the missile may be fired before the country celebrates its Foundation of the State Day on 9 September. This further raises geopolitical tensions in the region."
Goldman said it maintains its end-of-year gold price forecast of $1,250 per ounce barring a substantial escalation in North Korea. Holdings in the world's largest gold-backed exchange-traded fund, SPDR Gold Shares GLD, rose on Friday to help underpin prices. Among other precious metals, silver was little changed at $17.89 an ounce, while platinum inched up 0.1 percent to $1,007.90. Palladium fell 1.4 percent to $963.23 after reaching its highest since February 2001 at $1,001 in the previous session.
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