Johannesburg: Gold eased on Tuesday as investors booked profits after the previous session’s rise to a one-year high, though prices remain underpinned by safe-haven demand because of continued concern over North Korea’s nuclear posturing.
Spot gold was down 0.2 per cent at $1,332.40 an ounce by 1020 GMT, having peaked on Monday at $1,339.47, its highest since late September.
US gold futures were up 0.5 per cent at $1,337.50.
“Gold shot up quite a bit in the past few days so if you bought it then you’ve made a nice profit and you could take some off the table,” said Robin Bhar, head of metals research at Societe Generale.
Holdings in the world’s largest gold-backed exchange-traded fund, SPDR Gold Shares GLD, rose on Friday to help underpin prices.
Much of gold’s recent strength can be attributed to the flight to assets perceived as being at less risk from geopolitical uncertainty that has been stoked up by events in the Korean peninsula.
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.
Meanwhile, 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 on Tuesday.
Yet stock markets in Europe bounced back on Tuesday as traders showed reluctance to price in the tail risks on every possible bad outcome and instead focused on the more prosaic but upbeat global economic picture.
A recovery in the global economy is negative for gold because it raises expectations for interest rate increases, which lift the opportunity cost of holding non-yielding assets and boost the dollar, in which gold is priced.
Among other precious metals, silver slipped 0.5 per cent to $17.81 an ounce, while platinum was down 0.9 per cent at $998.25.
Palladium edged 0.1 per cent lower to $976 after reaching its highest since February 2001 at $1,001 in the previous session.
