• U.S. and South Korea begin military drills.
  • U.S. bond yields, global stocks fall.
  • COMEX speculative longs at two-month high.
  • Investors look to Jackson Hole meeting.

Gold rose on Monday as tensions over North Korea fueled safe-haven demand, while doubts about U.S. President Donald Trump’s ability to enact pro-business policies pushed U.S. bond yields to near two-month lows and weakened the dollar.

Investors braced for North Korea’s response to computer-simulated military exercises begun by South Korean and U.S. forces on Monday that will continue until Aug. 31.

“Gold is being supported by the war games and the uncertainty in Washington,” said Saxo Bank analyst Ole Hansen.

Spot gold was up 0.58 percent at $1,291.50 an ounce.

U.S. gold futures for December delivery settled up at $1,296.70 an ounce.

Gold on Friday surged above $1,300 an ounce for the first time since November following attacks in Spain and rising fears over Trump’s ability to push through tax reform and investment, which pushed stock markets lower. But gold prices fell back after Trump fired his nationalist and anti-globalisation chief strategist Steve Bannon.

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