Gold Trades Above $1,500

Gold Trades Above $1,500

Gold trades above $1,500 at seven-week high on Comex early Friday, heading for its best year since 2010.

The yellow metal has advanced for the past four sessions, even amid an equities rally and optimism over a phase-one U.S.-China trade accord, which would typically be bearish factors. Gold climbed throughout the year as a hedge against uncertainty when it appeared that the negotiations had stalled.

Gold’s momentum “is a little mysterious and no one wants to stand in the way,” Tai Wong, the head of metals derivatives trading at BMO Capital Markets, told Bloomberg. The fact that the metal has increased even as equities, Treasury yields and the dollar have advanced “leads to an assumption that bulls will buy in the New Year, so the market is trying to position ahead of time.”

February gold futures rose 0.6% Thursday to settle at $1,514.40 an ounce on Comex. They increased 2.3% for the week through Thursday. Holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, rose 0.4% Thursday to 892.37 metric tons, Reuters reported.

Trading has been light this week, with most markets around the world closed Wednesday for Christmas, and many — including Australia, Canada, Germany and the U.K. — closed Thursday as well. Low liquidity typically makes markets more volatile.

Silver rose 0.8% Thursday to settle at $17.99 an ounce on Comex. The March futures contract advanced 4.5% in the week to Thursday. Spot palladium, a metal used primarily in autocatalysts, rallied 2.4% so far this week amid a supply crunch. Spot platinum was up 3.9%.

In economic news, the U.S. Labor Department reported Thursday that initial jobless claims fell for a second week after a big increase earlier in December. The number of Americans filing for unemployment benefits dropped by 13,000 to a seasonally adjusted 222,000 in the week through Dec. 21. Economists surveyed by MarketWatch had estimated new claims would reach 220,000.

In China, industrial profits rose 5.4% year on year to 593.9 billion yuan in November, compared with a 9.9% year-on-year decline in October, MarketWatch reported, citing data from the National Bureau of Statistics on Friday.

Japan’s industrial output dropped for the second straight month in November, with Reuters reporting that it increases the likelihood that the economy will contract in the fourth quarter. Factory output decreased 0.9% last month from October, a slower decline than the 1.4% fall in a Reuters forecast. Separately, Japanese retail sales dropped a larger-than-expected 2.1% in November, Reuters said.


Disclaimer: This editorial has been prepared by Dillon Gage Metals for information and thought-provoking purposes only and does not purport to predict or forecast actual results. This editorial opinion is not to be construed as investment advice or as a recommendation regarding any particular security, commodity or course of action. Opinions expressed herein cannot be attributable to Dillon Gage. Reasonable people may disagree about the events discussed or opinions expressed herein. In the event any of the assumptions used herein do not come to fruition, results are likely to vary substantially. It is not a solicitation or advice to make any exchange in commodities, securities or other financial instruments. No part of this editorial may be reproduced in any manner, in whole or in part, without the prior written permission of Dillon Gage Metals. Dillon Gage Metals shall not have any liability for any damages of any kind whatsoever relating to this editorial. You should consult your advisers with respect to these areas. By posting this editorial, you acknowledge, understand and accept this disclaimer.