Gold prices shot to a nearly a 10-month high in Tuesday morning after North Korea escalated geopolitical tensions by firing a ballistic missile over northern Japan.
The yellow metal rallied to reach more than $1,327 per ounce - the highest price seen since before the US presidential election in November last year - after the missile launch prompted investors to rush to safe haven assets.
According to local media, the projectile passed over the Tohoku region of northern Japan and landed 1,180 km east of Cape Erimo on Hokkaido. The Japanese government told people in the city to take cover.
Japan's Prime Minister Shinzo Abe said the missile was an "unprecedented, grave and serious threat".
"Although investors have become sensitised to such actions by [North Korean leader Kim Jong-un's] regime, firing missiles over Japan is a rare occurrence and the message appears to be that North Korea is ready to escalate tensions," said Hussein Sayed, chief market strategist at FXTM.
Sayed added: "Whether another round of global risk off will come into play, relies heavily on the US response. So far, no tweets are coming from President Trump’s account, nor are we seeing an official response from the White House administration. If Trump decides to escalate the matter and hint of a possible attack, the situation will become messy and lead to a severe sell off in risk assets."
The Japanese yen, which also benefits from risk-averse traders, rose 0.8 per cent to 108.33 against the US dollar, its highest point since April. Another safe haven, the Swiss franc, hit a one-month high of 0.9523 franc to the dollar, up 0.3 per cent.