Gold Prices Hit 2-Month Highs, Defensive Demand Continues

Retail brands surprise on Wall Street

Globally, Gold rose after North Korea said it is considering an attack on the US Pacific territory of Guam just hours after President Donald Trump warned Pyongyang that any threat to the US would be met with "fire and fury".

"Geopolitics splashed cold water on the markets", said JJ Kinahan, chief strategist at TD Ameritrade.

The euro was down 0.1 percent at $1.175 while the dollar fell 0.6 percent to 109.68 yen.

United Kingdom stocks dropped Wednesday, as assets seen as riskier were swept aside amid escalating tensions between the USA and North Korea.

In Europe, the Stoxx 600 Index finished the session with a gain of 0.2 percent from the previous close.

The VIX closed 1.4 per cent higher but at the lowest level of the day at 11.11, after rising as high as 12.63.

Investors' unease over escalating tensions between the USA and North Korea had weighed on stocks earlier in the day, pushing gold and bond prices slightly higher.

In overseas trading, stock markets across the Asia-Pacific region saw further downside during trading on Thursday.

Intensifying turmoil between the U.S. and North Korea continued to strain forex markets across the globe and to lift demand for assets perceived as safe havens for the second day.

But while most traders appeared to favour safe-haven assets, bargain seekers helped Wall Street's three major indexes pare the day's earlier losses.

In 3.28pm trading in NY, the Dow Jones Industrial Average fell 0.15 percent, while the Nasdaq Composite Index declined 0.18 percent. The company's stock dropped $4.15, or 3.88 per cent, to $102.83.

The dollar weakened after news that U.S. producer prices unexpectedly fell in July, recording their biggest drop in almost a year and pointing to a further moderation in inflation that could delay a Federal Reserve interest rate increase.

Japan is the world's biggest creditor nation and there is an assumption investors there will repatriate funds should a crisis eventuate. Sterling was last trading at US$1.3006, up 0.02 per cent on the day.

Data showed USA producer prices unexpectedly fell in July, recording their biggest drop in almost a year, while another set showed the number of Americans filing for unemployment benefits unexpectedly rose last week.

The 30-year bond last rose 5/32 in price to yield 2.8107%, from 2.818% late on Wednesday.

Elsewhere in commodities, the September crude contract advanced 20 cents to US$49.76 per barrel and the September natural gas contract was up seven cents to US$2.95 per mmBTU.

Persisting global worries took gold prices to an over two-month high of Rs 29,890 per 10 grams with a gain of Rs 340 on Thursday, mirroring a firm trend overseas amid heavy local buying.

Spot gold rose 0.6 per cent to $1,267.79 per ounce at early trade. United States gold futures gained 1.50 per cent to US$1,281.50 an ounce.

The US producer prices data was slightly below consensus forecasts with both headline and core prices declining 0.1% on the month.

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