· Gold scored its strongest weekly gain in four months on Friday to settle at the highest level in more than two months, as simmering North Korean tensions buoyed haven demand for precious metals.
December gold GCZ7, -0.41% rose $3.90, or 0.3%, to settle at $1,294 an ounce. The settlement was the highest for a most-active contract since June 6, according to FactSet data. For the week, the metal rose 2.3%—the strongest weekly gain since the week ended April 13.
· Gold prices fell by half a percent on Monday, retreating from last week's two-month highs, as dollar strength and the easing of tensions between the United States and North Korea pushed prices lower.
· Though North Korea's Liberation Day celebration on Tuesday could raise the temperature again, markets were relieved that the weekend passed without more inflammatory rhetoric.
· Meanwhile, the dollar broadly rose from last week's four-month lows against the yen and traded up against a basket of currencies, making dollar-priced gold costlier for non-U.S. investors.
· "A lot of the negative news is priced into the dollar. That, combined with no real escalation in North Korea, should lead to lower gold prices, though it doesn't mean we expect a very negative trend. We'll stay within the$1,200 to $1,300 range for the year," said ABN Amro strategist Georgette Boele.
· Spot gold fell 0.6 percent to $1,281.21 an ounce by 2:33 p.m. EDT (1833 GMT), having reached its highest since June 7 at $1,291.86 in the previous session. U.S. gold futures for December delivery fell 0.3 percent to settle at $1,290.40.
· "Although more aggressive rhetoric between the U.S. and North officials would temporarily boost gold prices, we see outright military action as unlikely and upward pressure on gold prices stemming from the confrontation as limited," said BMI Research in a note.
"Looking longer-term, we expect that prices will eventually resume their medium-term uptrend, buoyed by a relapse in US real interest rates."
· Consumer prices in the United States rose less than expected last month, data showed on Friday, suggesting benign inflation that could persuade a cautious Federal Reserve to delay raising interest rates until December.
· Hedge funds and money managers boosted their net long, or buy, position in COMEX gold for the fourth straight week to a near two-month high in the week to Aug. 8, data showed on Friday.
· Spot gold faces strong resistance at $1,291 an ounce and could hover below this level or retrace to support at $1,278, Reuters technical analyst Wang Tao said.
· September silver SIU7, -0.74% added half a cent, or less than 0.1%, to $17.07 an ounce, for a gain of roughly 5% on the week. The settlement was the highest since mid June.
But tonight, silver fell 0.1 percent to $17.05 per ounce, having climbed last week to its highest since mid-June.
Reference: Market Watch, Reuters
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