Gold sits at 11-month tops amid global flight to safety

Escalating geopolitical tensions over the Korean Peninsula triggered a global flight to safety on Monday and lifted gold prices to 11-month highs, just short of $1340 level. 

North Korea claimed to have tested a hydrogen bomb over the weekend, its sixth nuclear test, provoked the usual knee-jerk shift to traditional safe-haven assets and had a positive repercussion on the precious metal. 

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Investors on Monday would keep a close eye on the UN Security Council meeting for a new set of sanctions on N. Korea over its latest nuclear missile test. 

   •  UN Security Council to meet Monday on North Korea nuclear test

his coupled with a fresh wave of US Dollar selling bias, in wake of Friday's disappointing US jobs report, provided an additional boost to the dollar-denominated commodity and lifted the yellow metal to its highest level since September 2016.

Market participants, however, remained convinced that the Fed remains on track to start trimming its massive balance sheet, and could further raise interest rates this year, which could possibly keep a lid on further up-move for the non-yielding commodity.

Technical levels to watch

A follow through buying interest beyond $1340 level, the metal is likely to surpass $1343 intermediate resistance and dart towards its next hurdle near the $1350-52 region. 

On the flip side, $1332 area (session low) now seems to protect immediate downside, which if broken could accelerate the slide towards $1325 horizontal support.