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Gold gains, set for biggest yearly rise since 2010

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Gold prices rose on Tuesday to a three-month high as the US dollar weakened, with the precious metal set for its biggest annual rise in nearly a decade in 2019, when the US-China trade war had investors seeking safe harbors from a possible recession.

[BENGALURU] Gold prices rose on Tuesday to a three-month high as the US dollar weakened, with the precious metal set for its biggest annual rise in nearly a decade in 2019, when the US-China trade war had investors seeking safe harbors from a possible recession.

Gold was up 4 per cent for December, on track for its biggest monthly rise since August.

Spot gold rose 0.3 per cent to US$1,519.41 per ounce as of 1.37pm ET (1837 GMT), having earlier hit a three-month high of US$1,525.20.

US gold futures settled up 0.3 per cent at US$1,523.10 an ounce.

"With gold starting to break out, you have a lot of traders coming in. They think this is the next leg up," said Michael Matousek, head trader at US Global Investors.

"This rally in gold and gold-related equities is just starting to ramp up... It consolidated for six years and it's just starting to break out again."

Gold prices have risen over 18 per cent in 2019, set for their biggest yearly rise since 2010. The long-running US-China trade war caused fears of a global economic slowdown, prompting major central banks to resort to quantitative easing, an environment supportive of gold.

US President Donald Trump said on Tuesday that Phase 1 of the trade deal would be signed on Jan 15 , though investors remain cautious, awaiting details of the agreement.

"The explosive (gold) rally witnessed in recent weeks will most likely extend into 2020 despite easing trade tensions between the world's two largest economies," said FXTM analyst Lukman Otunuga.

"A lingering sense of caution over trade developments and lack of details on the Phase 1 deal may also stimulate appetite for gold during Q1 of 2020."

Supporting gold in the session was a weaker US dollar, which dipped for a fourth session. Elsewhere, palladium has soared more than 53 per cent in 2019, marking it one of the top performers in commodity assets for the year.

The metal rose 1.6 per cent this session to US$1,938 an ounce and has gained about 5 per cent in December.

Palladium's rally was triggered by concerns that its supply is limited as demand mounts, lifting it to nearly US$2,000 an ounce.

Platinum was up 0.5 per cent at US$962.50, having added almost 7 per cent in the month. The metal was en route to its best years since 2009. Silver fell 0.4 per cent to US$17.85 an ounce, but added 15 per cent in 2019.

REUTERS