Gold futures headed higher Friday for a third consecutive session, on track to book a modest weekly advance, with geopolitical turmoil and broader equity market weakness helping to underpin gains.
The yellow metal found some haven-related lift from geopolitical worries surrounding Britain’s planned exit from the European Union.
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“Gold looks vulnerable to weakness in the very short term from a technical perspective,” said Mark O’Byrne, research director at Dublin-based GoldCore. However, geopolitical risk “should support gold and lead to gains into year end and in 2019.”
Gold for December delivery GCZ8, +0.52% on Comex rose $7.30, or 0.6%, to $1,222.30, poised to score a gain of roughly 1.1% for the week. December silver SIZ8, +0.57% added 8.2 cents, or 0.6%, to $14.345 an ounce, with prices looking at a 1.4% weekly rise.
Palladium futures PAZ8, +1.71% meanwhile, continued their advance to all-time highs, with the December contract up 1.9% at $1,1159.30 an ounce, a day after logging a record close.
“While we remain positive on gold prices going toward and into 2019, gold still seems to lack clear price directionality for the time being, but global jitters are certainly emerging,” said Christopher Louney, analyst at RBC Capital Markets, in a note.
Gold’s moves follow a tumble by equity markets, a recent plunge by oil, growing worries about stresses in the global economy, continued trade tensions and uncertainty over longer term growth trends, Louney noted.
However, while the U.S. dollar remains the strongest and most consistent factor for gold, “it’s likely in our view that correlations with other asset classes will begin to strengthen and re-emerge over the next 6-12 months and thus reassert themselves in gold’s favor,” Louney said. “While new positions may not appear entirely attractive at the moment, they are likely prudent over the longer-term.”
The ICE U.S. Dollar Index DXY, -0.57% a measure of the U.S. currency against a basket of six major rivals, was down 0.4% Friday and for the week. Gold and the dollar often have an inverse relationship.
Analysts at Commerzbank argued that palladium’s price rise, pushing the metal up nearly 40% since mid-August, was “excessive.”
“Thanks to its strong upsurge yesterday, the palladium price has come to within a good $30 of the gold price for a time, something we would not have believed possible just a few months ago,” they said, in a note.
In other metals trade, January platinum PLF9, +0.35% added 0.3% to $848.20 an ounce, while December copper HGZ8, +0.75% was up 0.6% at $2.764 a pound.
Among exchange-traded funds, the SPDR Gold Shares GLD, +0.61% added 0.8%, on tracked for a weekly increase of 1.1%.
