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Gold rallies above $1,300 on U.S.-China trade hopes and a weaker dollar

DATE POSTED:March 15, 2019

From Myra P. Saefong and William Watts: Gold futures climbed Friday, with the metal finding support in the wake of mass shootings at two mosques in New Zealand, as well as from a weaker tone for the U.S. dollar.

At least 49 people on Friday were killed at a pair of mass shootings at mosques in Christchurch, New Zealand.

The “New Zealand news is positively supporting gold,” said Chintan Karnani, chief market analyst at Insignia Consultants. “Brexit uncertainty is also supporting gold prices.” The British Parliament on Thursday voted to request an extension of the March 29 Brexit deadline.

In Friday dealings, gold for April delivery GCJ9, +0.64%  on Comex rose $8.20, or 0.6%, to $1,303.30 an ounce, with prices poised for a weekly rise of 0.3%. May silver SIK9, +0.95%  also rose 13.9 cents, or 0.9%, to $15.31 an ounce, though still trading about 0.2% lower on the week.

The attacks over in New Zealand has “stunned the markets,” said Naeem Aslam, chief market strategist at ThinkMarkets UK. As a result, “investors are seeking shelter under safe haven assets.”

Gold also appeared to get a boost from renewed optimism over prospects for a U.S.-China trade deal.

Upbeat comments on trade were cited as a factor behind global equity gains, with China’s state media citing “concrete progress” on the text of a trade agreement, news reports said. Also, Chinese Premier Li Keqiang, the country’s No. 2 leader behind President Xi Jinping, reiterated the government’s capacity to use stimulus to boost economic growth, reports said.

“While primarily seen as a safe haven, gold is highly exposed to the emerging markets, which make up more than half of global demand, and China in particular,” said Carsten Menke, commodities research analyst at Julius Baer, in a note.

“An improving economic backdrop and strengthening local currencies versus the U.S. dollar bode well for gold demand. This is particularly true for China, where gold demand has been lackluster over the past few years, as consumers have become increasingly concerned about the outlook for the economy,” Menke said.

A weaker tone for the U.S. dollar is also seen as a boon for gold bulls. The ICE U.S. Dollar DXY, -0.23% a measure of the U.S. currency against a basket of six major rivals, was off 0.3% at 96.542 and on track for a weekly decline of 0.8%. A weaker dollar can be supportive for commodities priced in the unit, making them cheaper to users of other currencies.

In other metals trade, June palladium PAM9, +0.07%  was up $1,40, or 0.1%, to $1,516 an ounce a day after settling at a record of $1,514.60 an ounce. It traded 3.9% higher for the week.

April platinum futures PLJ9, +0.37%  rose $4.40, or 0.5%, to $831.50 an ounce–up 1.7% for the week.

May copper HGK9, +0.52%  rose 1.3 cents, or 0.5%, to $2.905 a pound, set for a weekly rise of 0.4%.

Among exchange-traded funds, SPDR Gold Shares GLD, +0.51%  added 0.7% to trade 0.3% higher on the week.

The SPDR Gold Shares (GLD) was trading at $123.08 per share on Friday morning, up $0.67 (+0.55%). Year-to-date, GLD has declined -0.46%, versus a 5.73% rise in the benchmark S&P 500 index during the same period.

GLD currently has an ETF Daily News SMART Grade of B (Buy), and is ranked #1 of 35 ETFs in the Precious Metals ETFs category.

This article is brought to you courtesy of MarketWatch.

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