Dollar DROPS as investors flock to buy gold in ‘flight to safety’ over North Korea

Monday, April 17, 2017
By Paul Martin

GEOPOLITICAL tensions over North Korea pressured the dollar against the yen and lifted gold prices on Monday, while U.S. stocks edged higher after three straight days of losses.
Mon, Apr 17, 2017

North Korea made a failed missile test launch on Sunday, adding to regional tensions that have escalated over the past weeks as U.S. President Donald Trump has taken a tough rhetorical line with Pyongyang.

“We are seeing once again a little bit of a flight to safety as a result of the news over the weekend of North Korea’s attempted missile test. That’s resulting in a little bit of a weakness in the U.S. dollar,” said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange in Washington.

The dollar fell to a five-month low against the safe-haven yen, while the U.S. dollar index was down 0.4 percent. Gold gained 0.7 percent to hit a five-month high.

Most major European markets were closed for Easter Monday, while Wall Street reopened after being closed for the Good Friday holiday.

Worries over the upcoming French elections as well as softer U.S. economic data added to the bearish sentiment.

Data on Friday showed U.S. retail sales fell for a second straight month in March and consumer prices dropped for the first time in just over a year.

We are seeing once again a little bit of a flight to safety
Omer Esiner

Data showing China’s economy grew faster than expected in the first quarter helped offset the soft U.S. figures.

World stocks as measured by the MSCI world equity index rose 0.3 percent.

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