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Gold steady, North Korea worries support
[BENGALURU] Gold held steady on Tuesday after rising over one per cent in the previous session, supported by safe-haven demand amid rising tensions surrounding North Korea and as the US dollar eased from near three-week highs.
Spot gold was nearly unchanged at US$1,310.61 per ounce at 0339 GMT, not far from Monday's high of US$1,311.50, when it marked its biggest intra-day percentage gain since Sept 7.
US gold futures for December delivery rose 0.2 per cent to US$1,314.30 per ounce.
"The sharp sell-out in the equity market and rising risk aversion (are driving gold prices)," said Richard Xu, a fund manager at China's biggest gold exchange-traded fund, HuaAn Gold.
North Korea's foreign minister said on Monday that a weekend tweet by President Donald Trump counted as a declaration of war on North Korea and that Pyongyang reserved the right to take countermeasures, including shooting down US bombers even if they are not in its air space.
"Gold will continue to be headline-driven in the short term," said Jeffrey Halley, a senior market analyst with Oanda.
Asian shares slumped on Tuesday while the dollar remained off recent highs against the yen against the backdrop of rising tensions on the Korean Peninsula.
Investors also awaited a speech on "inflation, uncertainty, and monetary policy" by US Federal Reserve Chair Janet Yellen, in Cleveland at 1645 GMT.
"Chinese real estate developers getting hit pretty badly (on Monday) because of the curbing of property sales and the downgrade of China's sovereign rating are also causing people to rethink their risky positions," Mr Xu said.
China and Hong Kong shares fell on Monday, led by property stocks after some cities imposed new housing controls to hose down an overheated market.
Monday's weak performance followed a hawkish Federal Reserve policy statement last week and Standard & Poor's downgrade of China's sovereign credit rating.
Spot gold may test a support at US$1,252 in three months, a break below which could trigger a further drop towards the next support at US$1,174, Reuters technical analyst Wang Tao said.
In other precious metals, silver was up 0.1 per cent at US$17.19 per ounce. In the previous session, prices rose over one per cent to register their biggest intra-day percentage gain since Sept 7.
Platinum gained 0.1 per cent to US$939.50 per ounce after also registering its biggest intra-day percentage gain since Sept 7 in the previous session.
Palladium rose 0.5 per cent to US$914.70 per ounce.