Market Update: Geopolitical Tensions Trigger Rush to Safe Havens as Gold Spikes to 10-Day High
Investors were on high alert Thursday after President Trump called off a planned summit with North Korea next month, The subsequent haven rush sent gold prices to ten-day highs and the yen to its best levels in almost two weeks.
Gold prices jumped more than 1% as demand for riskier assets faded in the wake of geopolitical unrest between the United States and North Korea. August bullion prices gained 1.2% to trade near $1,310 a troy ounce on the Comex division of the New York Mercantile Exchange.
Silver prices surged 28 cents, or 1.7%, to $16.69 a troy ounce.
Thursday gains helped gold recoup from a massive slide earlier in the month as traders began pricing a fourth interest rate hike by the Federal Reserve this year. The U.S. dollar surged to five month highs, reducing gold’s investment appeal in the eyes of international traders.
Bullion has spent the better part of 2018 valued above $1,300, though the bulls have been unable to make a definitive break above $1,350.
Yen Strengthens Across the Board
Asia’s favorite haven currency rose across the board on Thursday, as carnage in emerging markets added to geopolitical uncertainty.
The yen rose more than half a percent against the dollar, sending USD/JPY to a session low of 109.00. The pair traded as high as 111.37 earlier in the week.
The yen has benefited from a sharp selloff in emerging market currencies, with the Turkish lira and Argentinian peso among the hardest hit. These countries are heavily influenced by the U.S. dollar because the bulk of their foreign funding is denominated in the greenback.
Despite its recent pullback, the dollar is up 3.3% over the past month.
Crypto Woes Continue
The cryptocurrency market touched fresh six-week lows Thursday, as the combination of regulatory risks and South Korean exchange uncertainty weighed on prices.
Crypto assets have lost a combined $50 billion in value since Sunday, with the total market cap bottoming near $320 billion earlier in the day. At the time of writing, the total market was worth $338 billion, according to data provided by CoinMarketCap.
All major altcoins were up compared with 24 hours ago, with EOS leading the rally. The digital currency was up more than 10% by late afternoon EST to trade at $1219.
Ripple XRP rose more than 4% to $0.635. Bitcoin cash rebounded more than 3% to $1,058.
Bitcoin traded relatively flat after hitting fresh lows. It was last valued at $7,585.
Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
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