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Gold price 2017: North Korea World War 3 fears fade pushing metal value down | City & Business | Finance

The precious metal is traditionally a safe haven, which rises during political and economic turmoil.

North Korea’s first missile launch over Japan pushed the gold price to its highest level in a year, as investors worried the planet was on the verge of World War 3.

But the latest missile failed to make a significant impact on markets, as investors now think nuclear war with North Korea is less likely to happen.

The gold price is now at around $1,325, falling from highs of $1,351 a week ago.

Fawad Razaqzada, market analyst at Forex.com said: “North Korea launched another missile test and this was one of its furthest-reaching yet.

“However, after an initial knee-jerk reaction, equities bounced back while gold and yen, in particular, weakened sharply.

“Investors are evidently confident that North Korea’s actions will not lead to a war, because there seems to be a split between world powers.

“The US says China, North Korea’s closest ally, and Russia should do more to put pressure on Pyongyang.

“But China doesn’t appear too keen on getting involved while Russia has condemned ‘aggressive’ US rhetoric.

“So, for the time being investors are largely ignoring geopolitical risks stemming from North Korea, for otherwise gold would be much higher and US indices far from being at record high levels.”

But if worries over North Korea again rip through markets, the gold price is set to bounce back.

Mr Razaqzada said: “Gold could ease back towards that key $1290-$1300 support area, but then I would expect to see at least a bounce of some sort from that zone.

“However, any move below $1276, the last low prior to the latest rally, would be bearish. For now, though, the trend is still bullish.”

David Madden, market analyst at CMC Markets UK, added: “The wider upward trend is still in place, and while it is above $1,300 the outlook could remain positive.”


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