Wednesday, 5th July 2006 (3452 views)

Following the announcement from Pyongyang that North Korea has successfully tested at least seven missiles over the Sea of Japan, gold prices rose sharply to a four-week high.

On the London exchange, stocks in the precious metal broke the $630 an ounce mark today (Wednesday, 5 July) as traders looked to gold as a safe haven amid fears of diplomatic and political unrest.

American national security adviser Stephen Hadley described the missile tests as "provocative" in a speech from Washington, sparking fears of a stock market slump, which in turn led to escalated bullion trading.

Prices rose by over one per cent, hitting $630.75 on morning trading in London, the highest level since early June.

"Geopolitical uncertainty always gives investors some motivation to buy the precious metals, and particularly gold,' Michael Widmer, an analyst at Macquarie Bank in London, told Bloomberg.

"It has the appeal of a safe haven investment," he added.

 

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