July 5, 2017
PRECIOUS-Gold inches up on N. Korea tensions, Fed minutes in focus
(Reuters) - Gold prices edged up on Wednesday as tensions on the Korean peninsula stoked safe-haven demand for the metal, while the release of minutes from the U.S. Federal Reserve's last meeting was also in focus.
"Safe-haven buying remerged in the gold market after the latest missile test in North Korea," ANZ Research said in a note.
"However, traders remain cautious ahead of the impending release of the FOMC minutes, which could give some clarity around the Fed's next rate hike."
Spot gold had risen 0.3 percent to $1,227.71 per ounce by 0414 GMT.
U.S. gold futures for August delivery climbed 0.7 percent to $1,227.10 per ounce.
"Asian investors were happy to make some bids due to the North Korean tensions," said Ronald Leung, chief dealer at Lee Cheong Gold Dealers in Hong Kong.
North Korea on Wednesday said its newly developed intercontinental ballistic missile (ICBM) can carry a large nuclear warhead, triggering a call by Washington for global action to hold it accountable for pursuing nuclear weapons.
Gold is seen as a store of value and therefore a safe-haven investment in times of economic and political uncertainty, when investors tend to sell riskier assets such as stocks.
"It remains to be seen how the North Korean situation will help (gold prices), but leaving that aside, the only notable draw we see in the precious metal at the moment is the fact that it will be running into considerable chart support between $1,180-$1,200 per ounce," said INTL FCStone analyst Edward Meir.
Spot gold is expected to test resistance at $1,231 per ounce, a break above which could lead to a gain to the next resistance level at $1,238, according to Reuters technical analyst, Wang Tao.
Investors were waiting for the minutes of the Fed's June meeting, due at 1800 GMT, to gauge how committed the central bank to hiking rates again this year. They are also looking for any detail on plans to wind back the Fed's massive balance sheet.
"We should hear some hawkish talk," said Leung, adding the Fed will likely focus on trimming its balance sheet before moving on to raising rates.
Asian share markets were subdued and the dollar slipped against the yen on Wednesday.
Among other precious metals, silver was up 0.7 percent at $16.18 per ounce. In the previous session, it fell below $16 an ounce for the first time since Jan. 3.
Platinum advanced 0.3 percent to $913.00 per ounce, after registering its biggest intraday percentage increase in two weeks the day before.
Palladium rose 0.2 percent to $852.99 per ounce.