· The price of gold has touched its highest point in nearly two weeks, supported by a softer US dollar and geopolitical tensions in Spain and North Korea, though gains were capped by expectations of another US interest rate increase.
· Spot gold was up 0.5 per cent at $US1,289.81 an ounce in afternoon trade, having touched its highest since late September at $US1,294.25. US gold futures for December delivery settled up 0.7 per cent at $US1,293.80.
· Investors were particularly wary on Tuesday as Pyongyang celebrated the founding of its ruling party, a day after Russia and China both called for restraint on North Korea following a Twitter post from US President Donald Trump hinting that military action was on his mind.
· In Spain, the leader of Catalonia's government called for a reduction in tensions in its standoff with Madrid over a bid in the wealthy northeastern region for independence.
· "The Fed is going to raise rates, so we see gold breaking out of the (current) range down to the $US 1,250level, with geopolitical tensions supporting the downside," said Societe Generale analyst Robin Bhar.
· "The only news holding down the price of course are the impending rate hikes from the Federal Reserve but if these political issues grow much worse you can bet that $1,300 will not be the top," said Miguel Perez-Santalla, vice president of Heraeus Metal Management in New York, referring to concerns about Spain and North Korea.
· Fed funds futures showed traders were pricing in a nearly 90 per cent chance of a December rate increase.
Reference: Business News
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