Risk-off trades are climbing after North Korea's missile launch

Investors are pulling into safe haven assets after North Korea's missile launch.

Gold climbed to its highest level this year earlier in the day, touching $1,326.08 per ounce.

The Japanese yen, Swiss franc, and US Treasurys are rallying Tuesday morning, as well.

Here's the scoreboard as of 8:08 a.m. ET (the yen and the Swiss franc are both against the US dollar):

• Gold: $1,326.00, +10.66, +0.81%
• Japanese yen: 108.56, -0.69, -0.63%
• Swiss franc: 0.9449, -0.0104, -1.1%
• US 10-year yield: 2.107, -0.052

"North Korea is back on the radar, and the spike in geopolitical tensions have supported demand for safe havens like CHF and JPY," Mark McCormick, North American Head of FX Strategy at TD Securities, said in emailed comments. "USD is underperforming on the risk off move, which is likely a function of the negative Washington risk premium that continues to grip the dollar."

Gold, Treasurys, the yen, and the Swiss franc are generally considered to be "risk-off trades."

Betting on yen and Swiss franc appreciation is popular during periods of heightened uncertainty. Treasurys, considered the safest place investors can park their money, and gold, the so-called "end of the world trade," are also bought up aggressively in times of stress.

North Korea launched a missile that flew over the northern Japanese island of Hokkaido at 5:58 a.m. local time, according to Japanese government officials. Japanese Prime Minister Shinzō Abe called the launch "an unprecedented, grave and serious threat" that damaged the security of the region.

The US dollar, meanwhile, continues to tumble, extending the sell-off that began last week. The index was down by 0.5% at 91.77 at 8:09 a.m. ET.

"North Korea's provocations have added to fuel to the fire that was already burning," Marc Chandler, the global head of currency strategy at Brown Brothers Harriman, said of the dollar.

"Coming out of Jackson Hole, the consensus scenario of ECB tapering and Fed allowing its balance sheet to begin shrinking, and fading prospects of tax reform and an infrastructure initiative in the US, the greenback was vulnerable," he continued. "In our assessment both fundamental and technical conditions had aligned that warned that the dollar's recent consolidation was over and a new leg lower had begun."

Get the latest Gold price here.