Gold price hits 1-yr peak as dollar sags, N.Korea concerns support

London (Sept 8)  Gold hit its highest in over a year on Friday as the dollar sagged after weaker-than-expected U.S. jobs data and as festering tensions over North Korea stoked safe-haven demand.

Spot gold was up 0.4 percent at $1,352.91, as of 0723GMT. Earlier in the session, it marked its strongest since August last year. It was up over 2 percent for the week, on track for a third weekly gain.

U.S. gold futures for December delivery rose 0.7 percent to $1,359.50.

"Lingering North Korean tensions and a general U.S. dollar, sell-off propelled gold to new 2017-highs overnight. Gold continues breathing thin air at these rarified levels with the next technical target at $1,375.00," said Jeffrey Halley, a senior market analyst at OANDA.

The dollar index was down 0.5 percent at 91.177 against a basket of six major currencies on Friday, after earlier touching its lowest since January 2015.

The greenback was under pressure as long-dated Treasury yields fell to 10-month lows, with weak U.S. jobs data and worries about the impact of hurricanes Irma and Harvey on the world's largest economy prompting demand for government debt.
                        
"Looking at the hurricanes, the damage is expected to be
huge and because of that safe-haven flows into gold, the
Japanese yen and Treasuries have been seen of late," said OCBC
analyst Barnabas Gan.  
    "The very strong yellow metal price is due to safe-haven
flows. Some of the gold-strength is very much due to the ongoing
North Korean tensions as well. The risk for intensified
conflicts is there," Gan said.     
     U.S. President Donald Trump said on Thursday he would
prefer not to use military action against North Korea to counter
its nuclear and missile threat but that if he did it would be a
"very sad day" for the Pyongyang leadership.            
    "Gold prices rallied as weaker-than-expected economic data
provided some doubt as to the next rate hike by the Federal
Reserve," ANZ analyst Daniel Hynes wrote in a note.
    The U.S. Federal Reserve should continue gradually raising
U.S. interest rates given low inflation should rebound, New York
Fed President William Dudley said.            
     Higher interest rates tend to boost the dollar and push up
bond yields, putting pressure on gold by increasing the
opportunity cost of holding non-yielding bullion.
    Spot gold may break resistance at $1,350 per ounce and rise
more to the next resistance level at $1,358, said Reuters
technical analyst Wang Tao.                
    Meanwhile, silver        gained 0.4 percent to $18.15 an
ounce. Early in the day, it touched $18.20, its best since
mid-April.
Palladium added 0.6 percent to $961.00 an ounce, but
was set to record its first weekly decline in seven weeks.
Platinum climbed 0.3 percent to $1,018.00 an ounce,
after earlier hitting its best since March.