June 20 (Bloomberg) -- Gold gained as investors bought the metal as a haven following reports North Korea may be preparing to test a long-range ballistic missile.
The missile may eventually have the capacity to strike the U.S., the New York Times said yesterday, citing former National Security Council aide Gary Samore. Gold typically rises in times of heightened geopolitical tension with conflict over Iran's nuclear program pushing bullion to a 26-year high last month.
The news from North Korea is ``one factor pushing up gold this morning,'' said Wolfgang Wrzesniok-Rossbach, head of metals trading at Heraeus Holding in Hanau, Germany. A weaker dollar and higher oil prices were also giving gold a lift, as investors bought bullion as an alternative investment, he added.
Gold for immediate delivery in London rose $3.71, or 0.7 percent, to $568.96 an ounce at 9:55 a.m. local time after earlier climbing as much as 1.3 percent. The precious metal has dropped 22 percent from a record $730.40 on May 12.
Gold surged 5.3 percent in Sept. 11, 2001, when terrorists attacked the U.S.
Gold also gained today after the dollar had its biggest decline against the yen in two weeks, making the precious metals cheaper for Japanese buyers.
The yen rose against the dollar after Bank of Japan Governor Toshihiko Fukui said the central bank needs to adjust interest rates from near zero percent ``without delay.'' Some investors buy gold to hedge against the erosion of dollar-denominated assets.
The yen climbed to 114.79 against the dollar at 9:25 a.m. in London, from 115.54 in late New York yesterday.
Among other metals for immediate delivery in London, silver rose 13 cents, or 1.4 percent, to $10.07 an ounce. Platinum gained $18.50, or 1.6 percent, to $1,158 an ounce while palladium climbed $3, or 1 percent, to $295 an ounce.
