Sales of gold bars rising amid rising tension on peninsula

Ivan Schwartz
August 13, 2017

Canada's main stock index hit its lowest close in a month on Thursday as oil prices fell and investors sought refuge in safe-haven assets amid rising tensions between the United States and North Korea.

"Right now the market is viewing it as a lot of saber-rattling and a lot of smoke, but not much fire", said Darrell Cronk, president of Wells Fargo Investment Institute. The expanded index S&P 500 rose 0.1 % to 2441,32 points. The S&P 500 is up 9 percent, while the Dow is up 10.6 percent. Earlier, the average had been down more than 88 points. The Russell 2000 index of smaller-company stocks picked up 1.69 points, or 0.1 percent, to 1,374.23.

But according to ICBC Standard Bank's Yuichi Ikemizu, the dollar is still weak and on a downtrend, which could help gold prices inch higher in the short term.

US stocks closed lower on Tuesday after Trump's vow to respond aggressively to any North Korean threats triggered a late afternoon selling spree.

President Donald Trump warned North Korea again on Thursday not to strike Guam or USA allies, saying his earlier threat to unleash "fire and fury" on Pyongyang if it launched an attack may not have been tough enough.

Trump launched another rhetorical salvo at the North to keep its nuclear weapons and ballistic missile programmes in check.

. The Swiss franc, another safe-haven, failed to maintain momentum from earlier days, losing ground relative to the euro and was last broadly flat versus the dollar after dollar/franc fell to a fresh two-week low 0.9582 earlier in the day. But the moves were modest. Silver also rose, gaining 43 cents, or 2.6 percent, to $16.82 an ounce.

The yield on the benchmark 10-year U.S. Treasury note fell to 2.255 percent from its U.S. close of 2.282 percent on Tuesday.

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"What we're seeing today is political tensions over North Korea and the United States. making people nervous", said Robert Pavlik, chief market strategist at Boston Private Wealth in NY. "Whether it is a credit crunch in China, policy error from the Fed, or fear of an over-valued US stock market, there are many reasons to maintain a balanced multi-asset portfolio that has exposure to defensive asset classes and currencies".

Fawad Razaqzada, technical analyst at FOREX.com, said geopolitics will continue to dominate investor sentiment over the short-term.

Emerging market stocks lost 1.27 percent.

The latest sell-off was the most severe yet, amounting to the biggest single-day drop for the stock market in almost three months. The stock lost $5.07 to $101.91.

The South Korean economy accounts for around 1.9% of world GDP, and a severe drop in South Korean GDP ... would have negative effects on key trade partners.

Shares in several other big media companies also declined. Brent crude, used to price worldwide oils, rose 20 cents to $52.10 a barrel in London. Regions Financial shed 23 cents, or 1.6 percent, to $14.07.

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