The precious metal hit $ 1,310, as investors rushed to shelter cash as the war of words between Kim Jong Un’s North Korea and US President Donald Trump escalated.
Mr Trump’s had tweeted that North Korea may not “be around much longer” if it continued nuclear missile testing, and aggressive comments.
North Korea’s foreign minister, Ri Yong-Ho said the comments were “tantamount to declaring war” and that Pyongyang has the right to take a counteraction, including shooting down US bombers- even when they’re not in Korean airspace.
Gold is traditionally a safe haven, and values tend to rises during political and economic turmoil. North Korea’s missile launch over Japan recently pushed the gold price to $ 1,351, its highest level in a year.
And the latest developments have markets again fearing World War 3 could break out, pushing up gold process.
The White House denied North Korea’s war claims and said it has four or five different scenarios to a resolution, and “some are uglier than others”.
Equity markets were also on edge following the war of words between the US and North Korea.
Michael Hewson, chief market analyst, at CMC Markets said: “The claim by North Korea foreign minister Ri that the US had unilaterally declared war on it at the weekend may seem ludicrous, however the claim that they reserved the right to shoot down US bombers in international air space should be taken seriously as the North Koreans do have form in this area for provocation.”
China’s Ambassador to the United Nations also spooked investors by claiming that the situation is “getting too dangerous”.
Hussein Sayed, chief market strategist at FXTM, added: “The best-case scenario is for the US to add more pressure on China and Russia, to increase sanctions against Pyongyang and pressure Kim Jong-un to sit around a negotiation table.
“However, as an investor, you should keep all options on the table.”