Gold prices rose in Asia on Monday after North Korea rattled markets with an estimated four missile launches after weekend forecasts for growth released in China had earlier aided sentiment.
North Korea fired multiple missiles off its east coast, which flew about 1,000 km (620 miles), South Korea’s military said, while Japan said three missiles landed inside its exclusive economic zone and that it would not tolerate the hermit state’s provocative actions.
Gold for April delivery rose 0.62% to $1,234.05 a troy ounce on the Comex division of the New York Mercantile Exchange. Elsewhere in metals trading, silver rebounded and gained 0.83% to $17.888 a troy ounce, while copper futures dropped 0.63% to $2.691 a pound.
On Thursday, the European Central Bank meets and will offer fresh cues on the future direction of its stimulus program.
At the weekend, China’s Premier Li Keqiang mapped out a cautious economic course for China, setting a modest downshift in growth to let the government rein in swelling financial risks and ensure a smooth changeover in the political leadership this year with a target for the world’s second-largest economy to see GDP gain about 6.5% for 2017, a small recalibration from last year’s range of 6.5% to 7% and not far from actual
growth of 6.7% in 2016, the slowest pace in a quarter-century.
Li also said Beijing aimed to keep consumer-price inflation under 3% in 2017, unchanged from last year’s goal. China’s consumer-price index rose 2.0% in 2016 from a year earlier.
Last week, gold prices fell on Friday and posted the largest weekly loss of 2017 so far amid growing expectations that the Federal Reserve will raise interest rates later this month.
Fed Chair Janet Yellen said Friday that a rate hike “would likely be appropriate” this month if the economy remains on track. The remarks cemented the view that the Fed will raise interest rates at its next meeting on March 14-15, following a series of hawkish comments by Fed policymakers earlier in the week.
Almost 80% of traders expect a rate hike at the Fed’s March meeting, compared to just over 60% on Wednesday, according to Investing.com’s Fed rate monitor tool.
Higher interest rates are typically bearish for gold, which is denominated in dollars and struggles to compete with yield-bearing assets when borrowing costs rise.
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