Gold steady at three-month high above $1,500 an ounce early Monday as it heads for its best year since 2010.
The yellow metal rallied as a hedge against geopolitical uncertainty after U.S. forces conducted airstrikes in Iraq and Syria on Sunday against five facilities that the Pentagon said were linked to an Iranian-backed militia. The strikes occurred at 11 a.m. Eastern time Sunday, CNN reported, citing an unidentified person familiar with the matter. The dollar also fell, boosting the precious metal.
Gold advanced 2.5% last week, 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 an investment hedge when it appeared that the negotiations had stalled.
February gold futures rose 0.2% Friday to settle at $1,518.10 an ounce on Comex. They are up 3.1% so far this month. Holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, increased 0.1% Friday to 893.25 metric tons, the highest level since Nov. 29., Reuters reported.
Trading has been light around the year-end holidays, and most of the world’s financial markets will be closed Wednesday for New Year’s Day. Low liquidity typically makes markets more volatile.
China’s Commerce Ministry said Sunday that the country has “proactively dealt with” trade frictions with the U.S., Reuters reported, citing a statement on the ministry’s website after an annual work conference. The ministry implemented the central government’s decisions and “resolutely safeguarded the interests of the country and the people,” it said.
In economic news this week, China’s official manufacturing PMI data are due out Tuesday, with the Caixin figures scheduled for Thursday. First-of-the-month manufacturing figures from the U.S. are due out after the holiday, along with minutes of the last Federal Open Market Committee meeting.
China’s Xi Jingping and North Korea’s Kim Jong Un are scheduled to deliver New Year addresses that have the potential to move markets. Investors will likely listen for any signals on the trade talks with the U.S. from the Chinese leader and for geopolitical indications from the North Korean.
Silver slipped 0.3% Friday to settle at $17.94 an ounce on Comex. The March futures contract advanced 4.2% last week and is up 4.9% so far this month.
Spot palladium, a metal used primarily in autocatalysts, rallied 2.8% last week amid a supply crunch. It’s up 3.6% in December. Spot platinum was up 3.9% and is up 5.6% this month.
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