Gold Lifted By Bargain Hunting, North Korean Missile Test
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(Kitco News) - Gold is higher Tuesday as physical demand and bargain hunting emerged following Monday’s steep sell-off, plus some investors are turning to the metal as a safe haven after another North Korean missile test, analysts said.
As of 8:03 a.m. EDT, Comex August gold was $5.50 higher to $1,224.70 an ounce in electronic trading on the U.S. Fourth of July holiday. September silver was nearly steady, easing 1.2 cents to $16.025.
August gold on Monday fell as far as $1,218 an ounce, its weakest level since May 9.
“Obviously, we had quite a big fall yesterday. So there is a bit of bargain hunting coming through,” said Robin Bhar, metals analyst at Societe Generale. “We saw some physical bids in the Asian time zone and some buying on the Shanghai Gold Exchange.
“There is also some geopolitical risk with the North Koreans firing another missile.”
European stocks fell overnight after North Korea said it successfully test fired an intercontinental missile for the first time. The test came in a week that Group of 20 leaders are planning to discuss North Korea’s weapons program.
Afshin Nabavi, head of trading at MKS (Switzerland) SA, also cited physical buying. “I think we should be close to the bottom,” he added.
Bhar and Nabavi commented that prices may remain largely range-bound with U.S. traders away for the holiday. But whereas this tends to be the norm for markets in holiday trading, Bhar also cautioned that sometimes a big market participant use this as an opportunity to place a big order and therefore “bully” a market in thin volume.
“But after having a substantial fall yesterday, I think today we’ll have a bit of consolidation,” Bhar said.