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Gold on Track for Third Straight Weekly Gain amid Dollar Drop, North Korea

July 28, 2017 at 16:46 by Andrew Moran

Gold futures are poised to record their third consecutive weekly gain. The yellow metal is benefiting from concerns over North Korea and their missile tests and a tumbling US dollar. Despite strong second-quarter gross domestic product (GDP) numbers, gold is still rallying to end the trading week.

August gold futures rose $8.00, or 0.63%, to $1,268 per ounce at 16:33 GMT on Friday. The yellow metal is trading at its highest level since June 14 and is on track to post its third straight weekly gain with an advance of 1.1%.

Silver, the sister commodity to gold, is also in the green on Friday. September silver futures climbed $0.11, or 0.71%, to $16.69 an ounce. The white metal is set to record a weekly increase of 1.6%.

Investors are flocking to precious metals as a safe-haven play. There are reports surfacing that the North Korean regime has conducted another series of missile tests. Military experts fear that the Kim Jong-un regime could launch missiles that may reach the West Coast of the US. Earlier this week, there were state-run media reports that Pyongyang has listed Hawaii and Alaska as potential targets.

Gold is further benefiting from a weaker US dollar as the greenback slipped 0.56%. The US dollar was trading lower despite the US economy advancing 2.6% in the April-to-June period. A lower dollar is good for commodities like gold and silver because it makes it cheaper for foreign investors to purchase.

The metals had been rallying all week, taking advantage of a dovish Federal Reserve. A policy statement from the Federal Open Market Committee (FOMC) has some traders thinking that the US central bank will delay any hikes to interest rates to later in the year as it unwinds the $4.5 trillion balance sheet. According to the CME Group FedWatch tool, the market anticipates a 50% chance of a December rate hike.

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