Gold continued its rally as the dollar slipped with investors seeking safe-haven amid rising geopolitical tensions over North Korea.
Spot gold climbed as much as 0.8 percent to $1,295.56 an ounce on Monday, the highest level since November 9. Last week, the metal rose 2.5 percent in its biggest weekly gain since June.
Drivers of gold price
On Sunday, North Korea performed what was believed to be a failed missile test launch, augmenting geopolitical risks.
According to U.S. President Donald Trump’s national security adviser, the U.S. is working with allies and China on responses to the failed test.
“Gold will likely retain a measure of strength heading into the French elections in about one week’s time, while ongoing tensions in North Korea should also keep the markets rather nervous,” said Edward Meir, analyst at INTL FCStone.
Considering future gold price movements, spot gold is expected to rise to $1,303 per ounce as it has broken above a resistance at $1,282.
Dollar dips to five-month low
The dollar dropped to a five-month low against the safe-haven yen, making the Japanese yen stronger by 0.2 percent at 108.43 per dollar. The U.S. dollar index was down 0.4 percent.
“The dollar weakness continues [in favor of the yen] for another day as the geopolitical tensions remain the major concern among investors. North Korea faced another failure in its nuclear test and investors are wondering what will be the reaction from the U.S. and its allies,” said Naeem Aslam, chief market analyst at ThinkMarkets.
The yen was slightly higher versus other major currencies, including the UK pound and the common currency euro.
In Asia, markets will be cautious regarding the release of economic data from China, notably GDP figures for the first quarter and industrial production and retail sales figures for February.
Crude oil prices dropped on Monday after a long holiday weekend following three straight weeks of gains.