Gold futures ended higher Friday for a third consecutive session to book a weekly advance of more than 1%, with geopolitical turmoil and broader equity market weakness helping to underpin gains.
The yellow metal found a haven-related lift from geopolitical worries surrounding Britain’s planned exit from the European Union.
“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, +0.58% on Comex rose $8, or 0.7%, to settle at $1,223 an ounce, scoring a gain of roughly 1.2% for the week. December silver SIZ8, +0.89% added 11.9 cents, or 0.8%, to $14.382 an ounce, with marking a 1.7% weekly rise.
Palladium futures PAZ8, +1.89% meanwhile, continued their advance to a new all-time high, with the December contract up 1.5% to finish at $1,154.60 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, -0.70% 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.
As for a palladium, R. Michael Jones, chief executive officer of Platinum Group Metals Ltd., pointed out that global vehicle sales are expected to reach 100 million in 2019 and China is “leading that growth with small gasoline engines.” That requires more palladium, he said, which is used in pollution-control catalytic converters on gasoline-powered vehicles.
Still, analysts at Commerzbank argued that palladium’s price rise, pushing the metal up nearly 40% since mid-August, was “excessive.” For the week, it was up 5.2%.
“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, +0.32% added nearly 0.2% to $846.60 an ounce, while December copper HGZ8, +1.60% rose 1.9% at $2.799 a pound.
Among exchange-traded funds, the SPDR Gold Shares GLD, +0.74% added 0.7%, on track for a weekly increase of 1%.