North Korea Causes Gold to Rise in August

The increased tension surrounding North Korea was arguably the biggest influence on market sentiment in August, triggering a subtle flight to safety among financial markets

Cyrique Bourbon 6 September, 2017 | 1:06PM

Gold bar

The increased tension surrounding North Korea was arguably the biggest influence on market sentiment in August, triggering a subtle flight to safety among financial markets. August was also no exception to the usual political deadlock, including further instability in the Trump administration and the ongoing Brexit comings and goings between the UK and European Union negotiators.

Although volatility during the month was low, the above backdrop was slightly more favourable to safe-haven assets, as evidenced by a rise in gold prices, up 4% and hitting a one-year high, and a slight outperformance of government bonds over equities in local currency terms.  For sterling investors however, exposure to overseas assets not denominated in sterling was rewarded due to the weakness from the pound.

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About Author

Cyrique Bourbon  is multi-asset portfolio manager for Morningstar Investment Management EMEA

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