Gold Registers Best Week Since August After Rally Gathers Pace
The Federal Reserve has signaled it would keep interest rates on hold through 2020 following three cuts this year.
(Bloomberg) -- Gold registered its biggest weekly advance in more than four months, with a decline in the dollar boosting demand for the metal as an alternative asset.
The greenback slipped versus all of its Group-of-10 peers, on track to erase its 2019 gains. The metal, which has gained 18% this year, is getting help from easier monetary policy across the world’s leading economies and sustained buying from exchange-traded funds and central banks.
Gold topped $1,500 an ounce this week on the way to its best year since 2010, helped by bets that simmering trade and geopolitical tensions will spur further gains for the metal in 2020. With the Federal Reserve expected to keep interest rates steady next year following three reductions in 2019, most traders and analysts in a weekly Bloomberg survey were bullish.
“Gold continues in its new trading range of $1,480-$1,530, supported by investors looking into next year’s upcoming political, economic and trade and tariff headlines,” George Gero, a managing director at RBC Wealth Management, said in an emailed note.
Gold futures for February delivery rose 0.2% to settle at $1,518.10 an ounce at 1:30 p.m. on the Comex in New York, after touching $1,519.90, the highest since Oct. 25. Prices are up 2.5% this week, the biggest weekly gain since Aug. 9.
Spot gold also headed for the biggest weekly gain since August.
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Still, trading volumes are low, “warning that the magnitude of these moves might owe more to illiquidity than conviction,” DailyFX strategist Ilya Spivak said. “It will be interesting to see what happens as overall market participation rebuilds in January.”
In other precious metals, Comex silver slipped, while on the New York Mercantile Exchange platinum futures fell and palladium rose. All three posted weekly gains.
--With assistance from Elena Mazneva.
To contact the reporters on this story: Yvonne Yue Li in New York at yli1490@bloomberg.net;Ranjeetha Pakiam in Singapore at rpakiam@bloomberg.net
To contact the editors responsible for this story: Phoebe Sedgman at psedgman2@bloomberg.net, ;Lynn Thomasson at lthomasson@bloomberg.net, Joe Richter, Millie Munshi
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