Gold Touches One-Week High

Gold Touches One-Week High

Gold touches a more than one-week high earlier this morning on concerns over geopolitical unrest in Hong Kong and Libya, while palladium continues to soar.

February gold futures gained 20 cents last week to settle at $1,560.30 an ounce on Comex. They rose 0.6% Friday. The yellow metal surged above $1,600 an ounce for the first time in almost seven years earlier this month amid geopolitical tensions between the U.S. and Iran. Spot palladium touched a new record above $2,500 an ounce.

Holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, rose 2.2% Friday to 898.82 metric tons, Reuters reported. And speculators cut their bullish positions in Comex gold in the week ended Jan. 14, according to the Commodity Futures Trading Commission’s Commitments of Traders report Friday.

U.S. equity and other financial markets are closed Monday for Martin Luther King Jr.’s birthday. The trading week is bookended by a pair of holidays as many markets in Asia will be closed Friday ahead of the Chinese New Year.

Last week, strong U.S. economic data fueled the rally in equities. The Dow Jones Industrial Average, Standard & Poor’s 500 Index and Nasdaq Composite Index all reached new highs. Gold is seen as a safe-haven asset and typically gets a boost in times of economic or political uncertainty and drops when things are looking positive.

A rally in downtown Hong Kong turned violent over the weekend as leader Carrie Lam’s government pushed back on a key demand of protesters and unrest that began in June stretched on. One of Libya’s commanders blocked oil exports at ports under his control.

Economic data released Friday showed U.S. industrial production fell 0.3% in December, the third decline in the past four months, in a move in line with expectations, according to MarketWatch. U.S. consumer sentiment edged lower in January from a seven-month high in December, University of Michigan data showed, but the level remained high, suggesting that Americans’ spending will continue to increase, Bloomberg reported.

In economic news this week, The International Monetary fund is set to publish new global economic forecasts Monday, with Bloomberg reporting that the U.S.’s days as a pacesetter for the world’s economy may be over. And the annual gathering of the world’s top leaders at the World Economic Forum in Davos, Switzerland, kicks off Tuesday. Comments from Davos could trigger market moves throughout the week.

Silver slid 0.2% last week to settle at $18.07 an ounce on Comex. The March futures contract increased 0.8% Friday. Spot palladium, a metal used primarily in autocatalysts, surged 18% last week, extending records amid a global supply crunch. Spot platinum advanced 4.4% last week.

 

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