Gold surged over 1% on Tuesday to fetch more than $1,600 an ounce as Apple Inc’s surprise warning about the impact of the coronavirus outbreak fueled concerns about global economic weakness, driving investors to lower-risk assets.
Palladium notched an all-time high, driven by short supplies of the auto-catalyst metal.
“The equity markets are under pressure and gold is still being viewed as a quintessential safe-haven asset as we do get some negative news in this case in regards to coronavirus and its effects on the global economy,” said David Meger, director of metals trading at High Ridge Futures.
By Ranjeetha Pakiam and Elena MaznevaBloomberg Dec. 31, 2019 3:46 PM
Gold climbed to a three-month high to clinch its best annual performance since 2010, as a weaker dollar helped cap a year marked by global economic jitters and trade frictions.
Bullion gained 19% this year as central banks globally embraced looser monetary policy to boost growth. Brexit, unrest in regions from Chile to Hong Kong and buying sprees from key central banks and exchange-traded funds have also helped support prices.
Spot gold climbed as much as 0.7% to $1,525.38 an ounce on Tuesday, the highest since Sept. 25. It traded at $1,520.13 at 1:40 p.m. in New York. Gold futures for February delivery rose 0.3% to settle at $1,523.10 on the Comex.
The metal managed to hold on to gains even after President Trump said he will sign the first phase of a trade deal with China on Jan. 15, easing uncertainty that has fueled haven demand for bullion.
“It is not really a surprise” especially after headlines yesterday that China’s Vice-Premier Liu He is coming to Washington to sign the so-called phase-one trade deal, said Tai Wong, the head of metals derivatives trading at BMO Capital Markets.
Some analysts doubt that gold’s strength will stick next year. JPMorgan Asset Management cautioned that bullion may not offer sound portfolio protection.
“There are very few certain environments in which gold does well, and it’s not necessarily the case that 2020 won’t be any of those,” Hannah Anderson, a global market strategist at JPMorgan, said in an interview with Bloomberg TV. “In the next downturn, I do believe that bonds still could be defensive assets.”
Like eager prospectors in a B western, many investors believe there’s gold in them hills — and that’s where they’re heading.
has often been a haven for investors, and there are plenty of reasons
to seek safety now. They include the trade war with China, weakness in
Europe, central bankers looking at subzero interest rates, turmoil in
the Middle East, the looming Brexit and uncertainty heading into the
2020 United States elections, and fears of a possible recession.
By mid-September, investors had poured nearly $8 billion this year into exchange-traded funds that hold gold.
This growing gold rush has pushed the price of the precious metal up nearly 27 percent since October 2017, to more than $1,500 an ounce. The last time gold was as expensive was April 2013, after it had declined from its August 2011 recession high of $1,917.90. Last month, analysts at Citigroup predicted that gold could hit $2,000 an ounce.
US gold futures dipped 0.3 per cent to $1,502.9 per ounce.
Reuters|Oct 03, 2019, 02.49 PM IST
prices were little changed on Thursday, following a jump of more than 1
per cent in the previous session, as investors awaited more data with
which to gauge US economic health and that could influence further US
Federal Reserve action on interest rates.
Spot gold was steady at $1,498.89 per ounce, as of 0758 GMT, while US gold futures dipped 0.3 per cent to $1,502.9 per ounce.
“After the sharp gains we are seeing some minor pullbacks on profit-booking, while sentiment in t ..
This article is part of the Journal’s quarterly markets review, “Investing in a Low-Yield World.”
stocks and bonds, precious metals don’t give investors any income
simply for holding them. So why were they among the market’s best
performers in the third quarter?
The reason: In a world of falling—or outright negative—yields,
nervous investors seeking havens are less likely to miss out on returns
from bonds if they put money into gold or silver.
That eliminates the major trade-off that typically confronts those interested in owning gold: It offers no yield at all.
declining opportunity cost is why trillions of dollars of
negative-yielding debt around the world and sharp declines in Treasury
yields in the U.S. have sparked a rally in precious metals. The price of
silver rose 11% in the third quarter, while platinum rallied about 6%.
Gold advanced 4% in the quarter and is now up 15% for the year, headed
toward its biggest annual gain since 2010.
The sudden allure of precious metals highlights the turbulence of this year’s third quarter, in which stocks, bonds and other assets swung wildly as investors weighed the latest developments in the U.S.-China trade war. Stocks recovered from a turbulent August to creep back toward records in September, while bond yields, which move inversely to prices, stabilized after approaching record lows earlier in the month.
Buying physical gold or silver
as an investment is not always as straightforward as it sounds. Novice
investors often get lost in a variety of options: “Should I buy minted bars or sovereign coins?” “Maybe that limited edition coin would be a good investment?”
Sensible investors evaluate bullion options by the price and premium on the gold spot price. But the premium is only one part of the equation. It doesn’t necessarily mean that you’ll get that premium back upon the sale.
Worse, there are unscrupulous dealers out there. They will try to
trick you into buying numismatics and other collectibles that have a
huge premium and won’t retain their value over time.
As a result, it’s essential to get an understanding of precious metals before dipping your toes into this market.
In this article, I’ll answer some of the most important questions you should ask yourself before buying precious metals.
(Kitco News) –
After three-straight weeks of gains, cracks are starting to appear in
gold’s bullish veneer, particularly among Wall Street analysts,
according to the latest results of the Kitco News Weekly Gold Survey.
It has been a volatile week for the precious metal as unprecedented
recession fears and new lows in bond yields drove investors from equity
markets and into alternative safe-haven assets. However, the gold
market is preparing to end Friday well off its six-year high, hit
earlier in the week.
Although sentiment, especially among Wall Street analysts, remains clearly bullish, caution continues to creep into the marketplace.
Gold was little changed on Wednesday in the wake of minutes from the
latest U.S. Federal Reserve meeting, but the precious metal was trading
above the two-week low hit in the last session as stock markets slid on
fresh trade tensions.
Spot gold was steady at $1,273.68 per ounce, having fallen to its lowest level since May 3 on Tuesday at $1,268.97.
U.S. gold futures settled 0.1% higher at $1,274.20.
minutes from U.S. Fed’s last meeting showed policymakers agreed that
their current patient approach to setting monetary policy could remain
in place “for some time.”
“Not many surprises here and not many
were expected. I would note though that this Fed meeting happened before
China backtracked on the trade talks. At the next meeting, almost
certainly there will be more caution,” said Tai Wong, head of base and
precious metals derivatives trading at BMO.
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Gold prices rose on Friday and were set to post a
weekly rise as the United States raised tariffs on Chinese goods,
exacerbating fears of a global economic slowdown, while palladium surged
more than 5% on technical buying and short covering.
The United States intensified a tariff
war with China on Friday by hiking levies on $200 billion worth of
Chinese goods. U.S. President Donald Trump said on Friday he was in no
hurry to sign a trade deal with China.
The escalation in the
U.S.-China trade dispute has weighed on stock markets worldwide and
boosted demand for assets viewed as safer.
“Gold is up today and will be up
in the short term until there is a concrete resolution to the
continuing trade tensions between the United States and China,” said Rob
Lutts, chief investment officer at Cabot Wealth Management.
Spot gold gained 0.2% to $1,286.56 per ounce and is up about 0.6% so far this week.
U.S. gold futures settled up 0.2% at $1,287.40.
“Gold is kind of inching high because of instability in the equities market,” said INTL FCStone analyst Edward Meir.
Palladium climbed 4.7% to
$1,354.51 per ounce as of 1:32 pm EDT (1732 GMT), having fallen to its
lowest since Jan. 4 at $1,263.85 in the previous session. The metal was
on track for a second straight weekly decline of about 1.2%.
“The price slide (on
Thursday) temporarily made palladium cheaper than gold again for the
first time since the start of the year,” Commerzbank analysts said in a
“The nice $70 bounce in
the palladium prices is on the back of some modest consumer buying after
the move below $1,300 yesterday and short-covering,” said Tai Wong,
head of base and precious metals derivatives trading at BMO.
For gold, the U.S.-China
trade conflict could also force the U.S. Federal Reserve to cut interest
rates, which could further support bullion prices.
Global anxiety has also
seen an uptick as U.S. bombers arrived at a U.S. base in Qatar to
counter what Washington describes as threats from Iran.
“The Iran situation is
not improving. Trump’s policies have led to a change in the dynamics.
We’re not sure whether the changes will make the situation safer or not
but the uncertainty will affect how investors see gold,” Lutts added.
Bullion was also
supported by a weaker dollar which fell after data showed a
smaller-than-expected rise in the U.S. consumer price index last month.
Silver was up 0.2% at $14.78 per ounce, while platinum rose 2.3% to $863.75.
Silver is on course to register a second straight week of declines, while platinum looks set for a third weekly drop in a row.