Gold clocks fresh 11-month highs near $ 1328 on N. Korea-led risk-off

Gold futures on Comex extended its rebound into a third day today and opened with a bullish gap, hitting the highest levels since October 2016.

Gold: Eyes on $ 1350

Having peaked at eleven-month tops of $ 1327.72, the yellow metal has entered a phase of consolidation, as markets continue to seek safety in the ultimate safe-haven gold amid escalating North Korean tensions, which spurred a fresh risk-aversion wave across the financial markets in Asia.

Tensions surrounding the Korean peninsula intensified, after Japan reported that North Korea launched three missiles, of which one of them broke into pieces and fell into the Japanese waters, posing a big threat to Japan.

The spot remains heavily bid so far this week, as the US dollar slumped across the board in sync with the US yields amid fading Dec rate hike bets, especially after the Fed Chair Yellen kept silence on the US monetary policy during her speech at the Jackson Hole Symposium last Friday.

Meanwhile, revival of concerns around the Brexit negotiations, as the UK heads for the third round of negotiations with the EU, also keeps the safe-haven bids for gold somewhat underpinned.

Looking ahead, developments surrounding North Korea’s missile launch will continue to support the precious metal, as attention turns towards the US employment data releases due in the second half of this week for fresh direction.

Gold Technical Levels

Higher side: 1334.66/81 (classic R1/ Fib R2), 1350/ 1350.50 (psychological levels/Sept 2016 high), 1366 (yearly tops)

Lower side: 1306 (5-DMA), 1299.67 (10-DMA), 1291.37 (20-DMA)