Gold Down Amid Geopolitical Concerns; Ahead of Fed Minutes


Gold prices are currently down on Wednesday, moving down beyond its lowest level in almost two months amid heightened geopolitical risk after North Korea said it had successfully test fired an intercontinental ballistic missile and ahead of the Wednesday release of Fed minutes from the June meeting which is expected to provide greater understanding into the chances for another hike this year.

Gold futures were at $1,217.86, by 10:04 AM GMT, down 1.62 cents, or around 0.1%. Trade volumes were thin on Tuesday, as U.S. markets remained closed for the Independence Day holiday.

The yellow metal dropped on Monday around 2% to touch its lowest since May 11 at $1,218.00 as a stronger dollar and gains in U.S. equities weighed. Then, gold prices bounced back after a sharp fall on Tuesday amid heightened geopolitical risk after North Korea said it had successfully test fired an intercontinental ballistic missile.

Meanwhile, looking ahead, the Federal Reserve will release the minutes of its most recent policy meeting at 2:00PM ET (1800GMT), as investors look for more clues on how committed the central bank is to hiking rates again this year. They are also looking for any detail on plans to reverse the Fed’s massive balance sheet.

North Korea Missile Test

South Korea’s military and Japan’s government confirmed that North Korea had fired an “unidentified ballistic missile” which landed in the Sea of Japan. Tokyo strongly protested what it called a clear violation of UN resolutions. Analysts said the missile  could put all of the U.S. state of Alaska in range for the first time.

U.S. Secretary of State Rex Tillerson said that the long-range missile launch indicated a “new escalation of the threat” of President Kim Jong-un’s regime and called for global action.

The timing of the launch is important, come just days before leaders from the Group of 20 nations are due to discuss steps to restrain North Korea’s weapons programs.

Other Comex Futures Also Down

Silver futures ticked down further 0.2 cents, or 1.1%, to $15.87 a troy ounce, after falling to $16.02 in overnight trade, a level not seen since early January.

Among other precious metals, platinum futures were down 0.14% to $904.85, while palladium rose 0.8% to $849.17 an ounce.

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