Gold climbs to 3-month high, poised for best year since 2010
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WEDNESDAY, AUGUST 10, 2022
Gold climbs to 3-month high, poised for best year since 2010

Global Economy

Reuters
31 December, 2019, 03:20 pm
Last modified: 31 December, 2019, 03:26 pm

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Gold climbs to 3-month high, poised for best year since 2010

Bullion has gained nearly 19% in the year mainly driven by a tariff war between the United States and China which triggered monetary policy easing by major central banks

Reuters
31 December, 2019, 03:20 pm
Last modified: 31 December, 2019, 03:26 pm
Gold bullion is displayed at Hatton Garden Metals precious metal dealers in London, Britain July 21, 2015/ Reuters
Gold bullion is displayed at Hatton Garden Metals precious metal dealers in London, Britain July 21, 2015/ Reuters

 

Gold prices jumped to their highest in more than three months on Tuesday on a weakening dollar, with the metal on track for its best annual show in nearly a decade, while palladium leapt towards its fourth straight yearly gain.

Spot gold hit its highest since September 25 at $1,525.20 and was up 0.6% to $1,524.44 per ounce by 0727 GMT. US gold futures rose 0.6% to $1,527.60.

Bullion has gained nearly 19% in the year, its biggest since 2010, mainly driven by a tariff war between the United States and China, which triggered monetary policy easing by major central banks.

"One of the main drivers behind gold's gain is the weakening in the dollar," said Margaret Yang Yan, a market analyst at CMC Markets, adding prices also rose on year-end bargain-hunting.

The dollar slipped against a basket of rivals, making gold cheaper for holders of other currencies.

"However, the upside is kind of limited because quantitative easing or rate-cutting cycle has come to an end for now and we don't see a possibility of any rate cuts in 2020," Yan said.

The US Federal Reserve cut interest rates three times this year before taking a pause. Lower interest rates reduce the opportunity cost of holding the non-yielding bullion.

On the trade front, a Phase 1 deal is likely to be signed next week, White House trade adviser Peter Navarro said on Monday.

"With liquidity much reduced in Asia, there is some potential for gold to spike higher on low volume with some risk hedging added into the mix," said Jeffrey Halley, senior market analyst, Asia Pacific at OANDA, in a note.

"The next resistance is at $1,535 an ounce." Further supporting gold, Asian shares slipped as investors locked in gains after a buoyant year of gains.

Speculators raised their bullish positions in COMEX gold contracts in the week to December 24.

Elsewhere, palladium rose 0.3% to $1,913.02 per ounce. Plagued by sustained supply deficit, the auto-catalyst metal extended gains into a fourth straight year.

Prices have jumped over 51% so far this year, the most since 2017, which would make palladium the biggest gainer among precious metals for the year.

Palladium, used mainly in catalytic converters in vehicles, rose to an all-time peak of $1,998.43 on December 17. Silver rose 1.1% to $18.10 and was poised to register its best year since 2010, rising about 17%.

Platinum gained 1.4% to $971.09 and was set to gain about 23% for the year, its best since 2009.

World+Biz / Top News

Gold / Gold market

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