Gold Near 10-Month High

Media reports from Japan said the missile, launched early Tuesday, flew over Hokkaido, before crashing in to the Pacific waters east of the northern Japanese island. The news led to a plunge in equities and saw the yen hitting a four-month high against the dollar. Bullion also drew support from the uncertainty surrounding President Donald Trump’s administration in the U.S. Trump said Monday that he hoped a government shutdown would not be necessary over his demand that the Congress approve his proposed $1.60 billion Mexican border wall.

Geopolitical risks and uncertainty tend to boost demand for safe-haven assets like gold and yen, which are considered relatively better store of value in times of volatility in other financial assets. Gold broke above the key psychological level of $1,300.00 an ounce on Monday. The metal was last trading around the $1,317.00-zone.

The ratio of open jobs in Japan per applicant soared to a 43-year high in July, but weak household spending figures indicate labour shortages are yet to fuel a surge in consumption.  Data from the Ministry of Health, Labour and Welfare showed early Tuesday that there were 1.52 jobs available for each applicant. That was the highest reading since February of 1974 when the country was in the midst of an economic boom.

However, household spending slipped 0.20% in July from a year ago after hitting a two-year peak in June, easily trailing a median forecast for a 0.70% rise. The latest spending data should maintain pressure on policymakers, who were betting that a tightening labour market would lift wages and boost consumption, helping the Bank of Japan to achieve its ambitious 2.00% inflation goal. USDJPY is off the lows of the session to last trade around 108.80000.