Gold soars, North Korea tensions rise: Aus shares to open higher

September 07 09:42 2017

Traders are looking to hide in safe havens like the Yen and gold as tensions between the USA and North Korea have flared again. On the Nasdaq, 1,443 issues rose and 1,359 fell.

Japanese Prime Minister Shinzo Abe called the missile test an “unprecedented, serious, and grave threat”, causing gold prices to reach $1,330 by Friday, Sept. 1.

The dollar was also under pressure because of lower-than-expected United States jobs data, which revealed that only 156,000 jobs were added in August, as against a market expectation of 180,000.

The aussie failed to gain ground versus the dollar, edging down to $0.7948 and being down by 0.24% during the day, following the disappointing figures on business inventories published on Monday.

In the Caribbean, risky Category 5 Hurricane Irma slammed across islands with pounding winds and raging surf en route to a possible landfall in Florida this weekend.

Oil prices gained as strong global refining margins and the reopening of U.S. Gulf Coast refineries provided a more bullish outlook after sharp drops due to Storm Harvey. The energy producer’s shares are declining nearly 1 percent. Rival automaker Honda was down 0.68 per cent at 3,036 yen while Nissan was off 0.59 per cent at 1,086 yen. The major indices opened lower on Tuesday before widening their losses in afternoon trade. The comments continued to weigh on the dollar Wednesday, boosting gold, which is priced in the USA currency and becomes less expensive to foreign buyers when the dollar declines.

The dollar came under renewed pressure against the yen on Monday afternoon and touched levels below 109.50, after South Korea’s defence ministry said it was still seeing signs that North Korea planned to stage more ballistic missile launches, possibly including an intercontinental ballistic missile. The major report is the ISM Non-Manufacturing PMI.

Japan’s Nikkei ticked down 0.2 per cent. Goldman Sachs fell 2.6% to $219.99.

USA stock futures declined on Labor Day, setting the stage for a volatile start to post-holiday trading. Traders also kept an eye on any developments in Washington, as lawmakers returned following the August recess.

The large-cap S&P 500 Index fell 0.8% to close at 2,457.75, snapping a six-day winning streak. Undoubtedly many sound money managers would allocate some portion of their funds in buying protection for their long stock holdings in case of a market correction.

Gold futures rose 0.7 per cent to just under $1,340 per ounce, their highest price since Donald Trump‘s election win last November. At 1:15pm BT, spot gold was was up 0.66% or $8.75 to $1,333.98 an ounce.

Data showed USA services sector activity accelerated in August amid strong gains in new orders and employment, while another report showed only a modest rise in the trade deficit in July – the latest signs that the economy had gathered momentum early in the third quarter.

People and office buildings are reflected on a brokerage house’s window as an electronic board displaying stock trading index in Beijing. – AP

Gold soars, North Korea tensions rise: Aus shares to open higher
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