Risk aversion remains a dominant force in financial markets after North Korea fired a short range ballistic missile overnight, defying global pressure and threats of stricter sanctions. Japan immediately lodged a protest, claiming the missile landed in the country’s exclusive economic zone. This latest provocation comes on the heels of the US sending a third aircraft carrier group towards the Korean Peninsula.
Despite the growing risks of a geopolitical showdown, the precious metal is flat on the session as the US dollar trends slightly higher on the session. Gold has now gained over 4.00% since hitting an eight-week trough of $1,213.80 on May 9th, with hedge funds managers increasing net long positions in COMEX gold during the week ended May 23rd, according to CFTC data. Gold was last trading close to $1267.25 per troy ounce with the short-term trend remaining upward while support at $1264.00 stays intact.