Gold cracks $1300 to finish year up 12.5%
Gold bulls have something to cheer about today even before the champagne corks fly on Sunday night.
In afternoon trading on Friday, the last business day of the year, gold was bid up to $1306.50, before dropping to $1303 at 13:53 EST. It was the first time since August, corresponding with a terrorist attack in Barcelona, that gold crossed the important $1300 an ounce thresshold. The yellow metal hit a 52-week high of $1346 an ounce in early September but then quickly sold off. February Comex gold was last trading at $1307.10, up .76% on the day.
On Tuesday spot gold reached a three-week high of $1281.03 in post-holiday trade on geopolitical concerns, while February gold futures hit $1285.10.
The gains continued yesterday, with spot gold closing in New York at $1294.70.
Today’s price jump means gold has posted a monthly rise of 1.51% and a yearly advance of 12.53% – its best annual performance since 2010.
A wilting US dollar, political tensions and less concern over the impact of US interest rate hikes, all fed into the gold rally.
Reuters noted the dollar is heading towards its worst year since 2003, “damaged by tensions over North Korea, the Russian scandal surrounding U.S. President Donald Trump’s election campaign, and persistently low U.S. inflation.”
The ICE U.S. Dollar Index dropped 0.5% on Friday, deepening its 2017 loss to 9.7%.
According to analysts the $1300 target will be the psychological level to reach in the new year.
“Look for continued steady gold over the 200-day moving averages and as gold is under invested. If we close over $1,300 more asset allocators joining the long side,” Kitco quoted George Gero, managing director at RBC Wealth Management. “Gold is still much about the dollar weakness, bonds — ten-year [yields] not moving after rate hike — and tax season in full swing.”