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 (ICBM).
Gold futures were at $1,224.94 a troy ounce by 05.58 AM ET (09.58 GMT), up $5.74, or around 0.47%.
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.
The timing of the launch is significant, come just days before leaders from the G20 group of nations are due to discuss steps to curtail North Korea’s weapons programs.
Gold ended the previous session down 1.47% at $1,224.34 an ounce, the largest one day percentage decline since June 15 as a stronger dollar and gains in US equities weighed.
Upbeat US manufacturing data on Monday reinforced expectations for another rate hike by the Federal Reserve this year and helped the dollar index to rebound from Friday’s nine-month trough.
Trade volumes were likely to remain thin with US markets closed on Tuesday for the Independence Day holiday.
Among other precious metals, silver was up 0.38% to $16.09 per ounce.
Palladium rose 1.08% to $851.48 per ounce while platinum rose 0.47% to $910.35 per ounce.
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