Gold prices rose to more than a one-week peak on Monday in low-volume trading ahead of the Christmas and New Year holidays, as the dollar eased slightly and uncertainties over the Sino-US interim trade deal lingered.
Spot gold rose 0.3 per cent to $1,482.61 per ounce by 0800 GMT. Prices had earlier risen to their highest since Dec. 12.
US gold futures rose 0.4 per cent to $1,486.10 per ounce.
“There are some cosmetic improvements (in trade), but there is no comprehensive deal. Secondly, everyone knows that the Federal Reserve is not going to raise interest rates any time soon, that makes gold really affordable,” said John Sharma, an economist at National Australia Bank.
Gold, considered a safe investment in times of political and economic uncertainty, is set to register its best year since 2010.
Bullion was supported by key central banks cutting interest rates on the backdrop of the 17-month long tariff war and its impact on economy.
The dollar eased 0.1 per cent against a basket of rivals, making gold cheaper for holders of other currencies.
“A subdued dollar, thin volumes because of Christmas holidays and uncertainty related to phase 1 trade deal, are supporting gold prices,” said Jigar Trivedi, a commodities analyst at Mumbai-based Anand Rathi Shares & Stock Brokers.
US President Donald Trump said on Saturday Washington and Beijing would “very shortly” sign their so-called phase one trade pact, but markets are waiting for more details about the deal they announced earlier this month.
“Trump and trade representatives from US and China have very frequently sent the same messages to the market, because of that people have ignored the weekend news. The major focus is when and where and which terms will be included in the trade agreement,” Trivedi added.
Traders were also concerned after China’s top lawmaking body on Saturday criticized the defense bill that Washington passed last week as “interference.”
Indicative of sentiment towards bullion, holdings of the world’s largest gold-backed exchange-traded fund, SPDR Gold Trust , rose 0.3 per cent to 885.93 tonnes on Friday.
Speculators also increased their bullish positions on COMEX gold and silver contracts in the week to Dec. 17, data showed on Friday.
Elsewhere, palladium rose 0.7 per cent to $1,868.77 per ounce. The metal declined as much as 5 per cent on Friday as investors booked profits after it hit record highs.
Silver rose 1 per cent to $17.36 per ounce, having earlier risen to its highest since Nov. 7, while platinum gained 1.1 per cent to $918.59.
Source: Economic Times
