Gold, silver shine as geopolitical tension rises

Gold, silver shine as geopolitical tension rises

"The level of risk aversion we're seeing suggests traders still believe the prospect of military action is very small but precautions are still being taken nonetheless, as this still has the potential to escalate very quickly and unexpectedly".

"(Safe-haven demand) has settled down to a certain extent, but the market is still expecting more news to come", said Brian Lan, managing director at gold dealer GoldSilver Central in Singapore. The hardest-hit currencies were those of New Zealand, South Korea, Brazil and India.

The dollar weakened against the yen, which is often sought in times of geopolitical tension.

USA stock futures ESc1 were marginally softer on Friday.

On Tuesday, U.S. President Donald Trump warned the Asian country about facing "fire and fury" if North Korea delivers more threats against the U.S.

The Korean won KRW=KFTC also continued to skid, sliding 0.3 percent to 1,145 won to the dollar, after earlier sinking to its lowest level in a month.

"If the USA should target North Korea, it would have to deal with North Korea's nuclear weapons, and there's also the possibility for Russian Federation and China to intervene", Yang said.

The Toronto Stock Exchange's S&P/TSX composite index fell 39.02 points, or 0.26 per cent, to end at 15,217.33.

"The markets in general are very on edge and they're very leery about risk", Mariann Montagne, a portfolio manager at Gradient Investments, told Bloomberg.

The S&P 500 dropped 1.4% to 2438.21, while the Dow Jones Industrial Average fell 204.69 points, or 0.9%, to 21,844.01. Basically if the streak of trading days without a 1%+ up or down day is going to be broken, it's better for it to break with a 1%+ down day than a 1%+ up day.

On Thursday the greenback had shed 0.8 per cent versus the yen, with the Japanese currency rallying broadly against most major currencies. Major European markets sank in early trade Thursday after the Dow recorded its second straight negative close Wednesday, although the dollar firmed against the pound and euro ahead of USA inflation data Friday. The yield - or interest rate - on a benchmark 10-year US Treasury bill dropped to 2.24%, while a 10-year German bund was yielding 0.43%.

The Australian dollar, which rose to a 19-month high near 90 yen late in July, was down 0.6 per cent at 86.77 yen after slipping to a one-month low of 86.23 yen. It was on course for a weekly rise of about 5%, the biggest such gain since July 2016.

Josh Saul, chief executive officer of London-based The Pure Gold Company, which is among the bullion merchants reporting incremental trading, said: "We've seen a 64% increase in people purchasing physical gold for the first time in recent sessions citing the breakdown of global relations". Crude retreated toward US$49 a barrel.

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