Silver advances nearly 1% as North Korea tensions mount

Silver futures gained nearly one percent in American trade, marking the highest since April 25 as the dollar index lost ground, following earlier data from the US, while markets assess the impact of North Korea's new nuclear test, the sixth such successful one, last Sunday. 

As of 06:46 GMT, silver futures due on December 15 added 0.75% to $17.950 an ounce from the opening of $17.880, with a five-month high at $18.090, and a session-low at $17.865, while the dollar index declined 0.30% to 92.36 from the opening of 92.64. 

Earlier from the US, Federal Reserve member Lael Brainard spoke about the economic outlook and monetary policy at the Economic Club of New York, where she mentioned the appropriateness of tightening the policy and increasing interest rates in a more gradual pace than thought before, pointing to some signals of dangerous asset bubbles.  

Bernard said Fed policymakers are ready to start trimming down the balance sheet, adding that recent weakness in prices could weigh on inflation overall, while warning from raising overnight interest rates anew, especially as inflation continues to soften for longer periods of time. 

Similarly, Bernard said the Fed should announce its acceptance of a slightly above-target inflation, while mentioning it's still far from the FOMC's 2% target, adding that inflation data should be analyzed carefully before raising rates again.

Otherwise, Federal Reserve Bank of Minneapolis President Neel Kashkari spoke earlier today about business leadership at the University of Minnesota, where he pointed to increased weakness in the labor market, saying that it might be too early to increase borrowing rates on federal money, due to its negative impact on inflation and economic performance. 

Kashkari noted that wages are still low, while wondering about the reasons behind their slow growth, and adding that the Federal Reserve is still unable to reach the inflation target of 2%. 

Gold futures are still drawing support from rising political tensions regarding the North Korean nuclear issue, after Pyonyang announced the success of a Hydrogen bomb test yesterday that cab be put on long-term ballistic missiles, while noting that the last test is considerably stronger than past nuclear tests. 

In response, US president Donald Trump called for imposing economic and trade sanctions on any country with relations to the North Korean regime, inflaming China, Pyongyang's largest trade partner, which said earlier today that these warnings are "unacceptable". 

Similarly, US Defense Secretary James Mattis warned of a massive military response to any attack on his country or any of its allies, including US pacific island Guam, noting in a press conference in front of the White House that Washington "doesn't look for an obliteration of any country, especially of North Korea, but as we said, all options are on the table". 

Otherwise, the dollar index gave up ground recently as chances of a Federal Reserve interest rate hike for a third time this year shrank, in turn underpinning the dollar-denominated silver futures.

Financial markets are pinning a mere 36.2% chance on a Fed rate hike in December, down from 39% recently, as US inflation softens while the unemployment rate rose and the pace of job creation slowed down in August.