Gold Climbs on Asian Tensions

Gold prices were on the rise Friday as missiles fired by North Korea raised geopolitical tensions in Asia.

June-dated bullion contracts recently were adding $2.30, to $655.60 an ounce, in the New York futures market.

Exchange-traded funds that hold inventories of gold bars also were rising, with the streetTracks Gold Shares(GLD Quote) and the iShares Comex Gold Trust (IAU Quote) both trading 0.2% higher.

North Korea reportedly fired a number of missiles into the sea between the Korean peninsula and Japan early Friday, raising concerns of war in Asia.

"It might have unsettled some nerves," says Matthew Turner, a commodities analyst with specialty London-based consulting firm Virtual Metals. "But if the missiles had actually hit Japan, then the gold price would be up a whole lot more than it is."

Some investors buy gold as a safe-haven asset during times of strife because the metal historically has been a universally acceptable and portable form of currency. Last October, North Korea said it conducted a successful test of a nuclear weapon, alarming the major powers of China and the U.S. as well as neighboring South Korea.

Also impacting gold's price action was the continued roll forward of contracts from the about-to-expire June-dated instrument to those lasting until August. Open interest in the June contract recently totaled 13.4 million ounces, down from 15.3 million Thursday. The total for the August contract rose to 10 million ounces from 9.2 million previously.