Media reports from Japan said the missile, launched early Tuesday, flew over Hokkaido, before crashing in to the Pacific waters east of the northern Japanese island. The news led to a plunge in equities and saw the yen hitting a four-month high against the dollar. Bullion also drew support from the uncertainty surrounding President Donald Trump’s administration in the U.S. Trump said Monday that he hoped a government shutdown would not be necessary over his demand that the Congress approve his proposed $1.60 billion Mexican border wall.
Geopolitical risks and uncertainty tend to boost demand for safe-haven assets like gold and yen, which are considered relatively better store of value in times of volatility in other financial assets. Gold broke above the key psychological level of $1,300.00 an ounce on Monday. The metal was last trading around the $1,317.00-zone.