THE price of gold has surged to its highest levels in around a year as the threat of North Korea sparking war hangs over markets.
The precious metal hit $1,340 with prices not seen seen since last September. The US said North Korea’s latest ballistic missile test showed the rogue state was “begging for war”, sending a chill across global markets. Stocks showed signs of recovery on Tuesday, but traditional safe havens, such as gold, have maintained value.
Investors typically put cash in the previous metal during times of political and market trouble. Fiona Cincotta from City Index said: “Gold continues to trade around its highest level for almost a year at $1340.
“Putting this into context, the last time gold traded at these levels was when news of President Trump’s victory shook the markets. “Safe haven currencies the Japanese Yen and the Swiss Franc both also continue to be in demand.
“However, as a whole the market’s reaction is in line with a rational outcome to the recent escalation, this is not the first time we have been here and judging by recent media reports it won’t be the last time either.”
Fawad Razaqzada, market analyst at Forex.com, added: “If you think about gold’s traditional role as a safe haven commodity, it makes sense for it to go up and stay up while geopolitical tensions are high.
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