Gold buoyed by North Korea tensions, USA inflation data

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The U.S. consumer-price index, set for release before Wall Street opens, will be closely monitored by investors for clues on inflation and the Fed's next move, said Mr. Kamal. Pyongyang meanwhile has threatened to strike Guam.

Continuing tensions between the United States and North Korea plagued the U.S. stock market rattling investors and sparking a pull back. The S&P 500 added 0.3%, though it was on course to end the week down 1.3%, its biggest loss since March. With the earnings season winding down, Old Mutual (LON:OML) is the only FTSE 100 company scheduled to update the market on its performance this morning. "This provides an excuse key in hand for investors to cash in profits, or at least to contain for the moment their fever buying in a market where many think it was ripe for a downturn", said Patrick O'hare of Briefing.

North Korea has since threatened to launch missiles at the USA territory of Guam, and the country previously threatened "all-out war, wiping out all the strongholds of enemies, including the US mainland".

Japanese markets were closed for a holiday, but the tense mood dragged Asian shares lower and an MSCI index of stocks across the globe posted its largest weekly drop since the week before Donald Trump won the US presidential election in November.

"It's been a bit of a roller coaster this week, with all the rhetoric between the U.S. and North Korea", said Jeff Kravetz, regional investment strategist at U.S. Bank Wealth Management. It was the benchmark's worst percentage drop since a 1.8 % decline on that same day in May.

Weaker-than-expected July consumer price data pointed to benign inflation that could cause the Federal Reserve to hold off from raising rates again this year. Only 3 of the 30 stocks in the Dow finished the day with a gain: IBM, Coca-Cola and McDonald's.

He goes on to say: "In all likelihood the North Korea problem will persist for years to come, with the U.S, and increasingly China, attempting to contain and restrain Kim Jong-un". Silver fell 0.3% to $17.04 per ounce after hitting $17.24, its highest since June 14, in the previous session.

The dollar slid to an eight-week low against the yen on Friday but was slightly firm against a basket of major currencies.

United States producer prices unexpectedly recorded their biggest drop in almost a year, and the number of Americans filing for unemployment benefits unexpectedly rose last week. The Producer Price Index (or PPI) fell 0.10%, while the market had forecast a rise of 0.10%.

Brent crude was up 80 cents at $53.50 a barrel and United States crude was up 60 cents and back up to $50.

On average, the S&P 500 falls 5% or more every 10 weeks and the index falls 10% every 33 weeks, according to data analyzed by AllianceBernstein going back to 1928.

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