The greenback rose on Monday as investors regained appetite for risk after the US and North Korea appeared to take a break from their respective war rhetoric. Over the weekend, US Secretary of State Rex Tillerson sought to downplay the risk of a conflict, saying the Trump administration was seeking a diplomatic settlement.
Last week’s tensions helped gold notch its strongest weekly performance in four months to settle at its highest level since the first week of June. However, actions by China to impose additional sanctions on North Korea have re-established a semblance of calm, causing gold prices to retreat and pullback lower. Gold was last seen around $1275 per troy ounce, close to 2.00% below the prior week’s highs. Strong support around the $1270-mark could see buyers potentially re-enter the market if tensions remain elevated.