Gold yesterday firmed up a foothold above US$1,500 an ounce as investors positioned for next year, with post-Christmas gains coming even as equities inched higher and US-China trade concerns eased.
Silver rose along with platinum and palladium in what has been a banner year for precious metals.
Bullion advanced for a fourth day, the best run since October, and headed for the highest close in more than seven weeks. The climb comes amid a focus on whether the US Federal Reserve’s interest rate-cutting pause would hold next year following three reductions this year.
“Without a dovish Fed pivot, it’s unlikely gold will make explosive gains, but it does appear the market is trying to carve out a new higher trading range,” AxiTrader chief Asia market strategist Stephen Innes said in a note.
That current trend “is a very favorable sign for gold bulls,” he said.
Gold is up 17 percent this year — set for the best showing since 2010 — as investors weighed the benefit of havens amid the to-and-fro of the US-China trade dispute and a run of central bank easing.
The latest tick higher came even as Asian stocks edged up, and US President Donald Trump on Tuesday said that a trade deal with Beijing is “done.”
“Caution needs to be exercised as the bullion markets could be extremely volatile, given the market’s low liquidity profile, especially to the downside as trade news remains positive and equity markets still scaling new heights,” Innes said.
Spot gold advanced as much as 0.4 percent to US$1,505.62 an ounce, the highest intraday price since Nov. 5, and was at US$1,503.79 at 7:08am in London, where many market participants remained on leave for Boxing Day.
Silver climbed as much as 1.4 percent to US$18.0220 an ounce.
Heading into the new year, there are mixed views on gold’s prospects.
Earlier this month, JPMorgan Chase & Co advised betting on gold to slide as the global economy gathers momentum. Among the bulls, Goldman Sachs Group Inc and UBS Group AG see prices climbing to US$1,600 an ounce.
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