Gold Prices Gain In Asia As North Korea Risks Grow

Investing.com – Gold prices gained in Asia on Thursday with comments from US ambassador to the UN Nikki Haley suggesting a complete oil embargo on North Korea, raising risk concerns.

for December delivery on the Comex division of the New York Mercantile Exchange rose 0.17% to $1,284.27 a troy ounce.

Elsewhere, China’s manufacturing PMI rose to 51.8 in November, a faster pace than expected 51.4 level expected while non-manufacturing also gained to 54.8 from 54.3 in October, official data released Thursday showed.

A reading above 50 indicates expansion, while a reading below that signals contraction.

“The latest official PMI readings suggest that growth momentum held up well this month,” Julian Evans-Pritchard, China economist at Capital Economics, said in a note following the data release.

The release of a private PMI survey may paint a better picture of the economic situation in China. The Caixin/Markit manufacturing PMI is expected to be published on Friday, with the services PMI reading coming next Tuesday.

The private surveys tend to focus on small and mid-sized firms.

Earlier, Japan reported provisional for October up 0.5%, compared with a provisional gain of 1.9% expected on month. Australia reported for October rose 0.9%, compared with a 1.8% fall expected and hit a 0.4% gain seen on month.

Overnight, gold prices came under pressure on Wednesday as Treasury yields rose on hawkish comments from Fed chair Janet Yellen and upbeat economic data.

Federal chair Janet Yellen testified on the economic outlook before the Congressional Joint Economic Committee on Wednesday, reaffirming that the Fed would continue to hike rates amid concerns of the economy overheating. Market participants took Yellen’s comments to be somewhat hawkish, prompting a surge in U.S.
Treasury yields, lifting the dollar higher while pressuring gold prices to lows.

“We are not seeing undue inflationary pressure in the labor market, so our policy remains accommodative,” Yellen said. “But we do think it’s important to gradually move our policy rate toward what I’ll call a neutral level, which would be consistent with sustainably strong labor market conditions,” she said.

Gold is sensitive to moves higher in both bond yields and the U.S. dollar – A stronger dollar makes gold more expensive for holders of foreign currency while a rise in U.S. rates, lift the opportunity cost of holding non-yielding assets such as bullion.

Also weighing on gold prices was data indicating underlying strength in the U.S. economy as third quarter economic growth remained solid. Gross domestic product increased at a 3.3% annual rate in the July-September period, the Commerce Department said in its second estimate of GDP on Wednesday, beating a previous estimate of 3%.

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