Palladium prices soar 59% in 2019 and mark sharpest annual gain since 2010
Gold futures Tuesday ended 2019 at the highest level since late September, after a strong rally for the precious metal produced the largest return in nearly a decade, despite a rally in equity indexes also.
Gold for February delivery GCG20, +0.09% rose $4.50, or 0.3%, at $1,523.10 an ounce, while March silver SIH20, -0.56% fell 8 cents, or 0.4%, to settle at $17.921 an ounce.
The day’s move helped gold log an 18.9% return for 2019, while silver is up around 15.3% since the end of last year. Based on trade in most-active futures contracts, that would be the strongest performance for the yellow metal since 2010, when gold rose 29.7%. For silver, that metal notched its best annual gain since 2016 when it rose 15.8%, according to FactSet.
For the month, gold has gained about 3.4% in December and during the quarter, while silver has advanced 4.8% in the month to date and 5.5% over the past three months.
“Gold is receiving an undercurrent of support into year-end from lower U.S. bond yields, persistent geopolitical risks, and ongoing U.S. economic uncertainty,” said Stephen Innes, chief Asia market strategist at AxiTrader, in a note.
“But with the weaker U.S. dollar narrative gathering steam into the election year 2020, risk hedgers are starting to flock to the security of gold rather than the dollar,” he said.
The ICE U.S. Dollar Index DXY, +0.26%, a measure of the U.S. currency against a basket of six major rivals, was off 0.4% at 96.365, leaving it up just 0.2% on the year. A weaker dollar is seen as a positive for commodities priced in the currency, making them less expensive to users of other currencies.
The yield on the benchmark 10-year U.S. Treasury bond TMUBMUSD10Y, +1.96% was on pace to close out 2019 near 1.9%, after falling below the psychologically important 2% level in July for the first time since October 2016, according to FactSet data.
Investors also were keeping an eye on developments in Iraq, where dozens of Iraqi Shiite militiamen and their supporters broke into the U.S. Embassy compound in Baghdad, part of a backlash over weekend U.S. airstrikes that targeted the Iran-backed militia.
But back on the home front, confidence in the U.S. economy was higher at the end of 2019 than at the beginning, according to a new reading of the U.S. Conference Board’s index, even though future expectations are for economic growth to be flat in the first half of 2020.
Optimism about the ability of American consumers to help extend a record economic expansion has played a role in propelling U.S. stocks to fresh highs in December, with the S&P 500 index SPX, +0.29% on track for its biggest annual gain since 2013.
Optimism about a partial U.S.-China trade pact also has helped. President Trump on Tuesday said the first phase of a trade deal will be signed on Jan. 15 and that he will travel to China “at a later date” to begin the second round of talks.
“Trader and investor attitudes remain upbeat going into 2020, due in large part to the world’s two largest economies, the U.S. and China, seeing a thaw in the more-than-two-year-old trade war that has slowed global economic growth,” wrote Jim Wyckoff, a senior analyst at Kitco Metals, in a Tuesday note.
In other metals trade, April platinum PLJ20, +0.66% rose $12.40, or 1.3%, to settle at $977.80 an ounce. For the year, platinum has soared about 21.6%, marking its sharpest yearly gain since 2009. For the quarter, platinum has climbed 9.4%, with an 8.1% return in the month to date.
March palladium PAH20, +1.70% finished Tuesday trade up $28.80, or 1.5% at $1,909.30 an ounce. For the year, palladium has soared more than 59%, representing its firmest annual gain since 2010. Over the past three months, palladium has jumped nearly 16% and gained 5.4% in December.
March copper HGH20, -1.24%, meanwhile, fell 3.6 cents, or 1.3% to end at $2.7970 a pound. For the year, copper rose 6.3%, with a roughly 8.5% return over the quarter and a gain of more than 5$ in the month to date.