Investing.com – Gold prices rose sharply on Monday as escalating geopolitical tensions on the Korean Peninsula fuelled safe-haven demand after North Korean Foreign minister Ri Yong Ho warned that Pyongyang has the right to “shoot down U.S. bombers”.
Gold futures for December delivery on the Comex division of the New York Mercantile Exchange rose by $14.07, or 1.08%, to $1,311.54 a troy ounce.
“The whole world should clearly remember it was the US who first declared war on our country." North Korea Foreign Minister Ri Yong said in reference to President Donald Trump’s tweet that “North Korea won’t be around much longer”.
"Since the United States declared war on our country, we will have every right to make countermeasures, including the right to shoot down United States strategic bombers even when they are not inside the airspace border of our country," Ri said.
The strong start to the week for gold comes after the precious metal slipped to a second-straight weekly loss last week as traders unwound some of their bullish bets on the gold.
Net bullish bets on gold fell to 236,100, according to a report from the Commodity Futures Trading Commission (CFTC) on Friday.
Demand for the precious metal, however, could come under pressure during the week as a flurry of Federal Reserve speakers are slated to deliver speeches including the central bank’s chair Janet Yellen on Tuesday.
Following the conclusion of its two-day policy meeting last week, the Federal Reserve signalled that a year-end rate hike remained appropriate.
In a rising interest rate environment, investor appetite for gold weakens as the opportunity cost of holding the precious metal increases relative to other interest-bearing assets such as bonds.
In other precious metal trade, silver futures gained 1.01% to $17.16 a troy ounce while platinum futures added 0.62% to $942.00.
Copper traded at $2.94, down 0.25% while natural gas fell by 1.13% to $2.99.