Gold is rising on “more safe-haven buying interest amid a still very wobbly US stock market,” Jim Wyckoff, senior analyst at Kitco Metals, said in a note to clients. “There was also some weaker economic data coming out of the European Union, to also un-nerve traders and investors.”
Bullion surged in the final quarter of 2018 as investors positioned themselves for a global slowdown, with fewer rate hikes expected from the US Federal Reserve. Worldwide holdings in gold-backed exchange-traded funds have jumped. Major parts of the US government will remain shuttered for a 12th day as President Donald Trump meets with congressional leaders from both parties at a White House briefing Wednesday on border security.
Gold futures for delivery in February delivery rose 0.2% to settle at US$1,284.10 an ounce at 1.34 pm on the Comex in New York after touching US$1,291 the highest since mid-June. Last month, the price posted the biggest quarterly increase since March 2017. Spot gold climbed as much earlier as 0.5% before erasing gains.
The same growth concerns that are boosting demand for gold as a haven are eroding support for industrial metals. Copper for three-month delivery at the London Metal Exchange fell as much as 2.2% to US$5,831 a metric ton, the cheapest since September. Lead, aluminum and zinc also declined, while nickel and tin advanced.
The Bloomberg Industrial Metals Subindex that tracks copper, aluminum, zinc and nickel slid as much as 1.7% to an almost two-year low.
“Risk appetite continues to decline following weak Chinese PMI data and the U.S. government shutdown,” analysts at TD Securities including Bart Melek said in a note. “Safe haven assets are up.”
