Silver ends near 4% weekly return, its sharpest since August
Gold settled near a three-month high Friday, clinching its best weekly gain in four months, bolstered by investor caution about how far the record rally for stocks can extend into 2020.
“It’s low bond yields, a seasonal aspect and people heading into the new year with record equity prices,” said Bob Haberkorn, senior market strategist at RJO Futures in Chicago, in an interview with MarketWatch, about the year-end gold rush.
“We’re seeing money go into gold so that investors have something safe in case there is a sell-off.”
Gold for February delivery GCG20, +0.08% on Comex advanced $3.70, or 0.2%, at $1,518.10 an ounce, its highest level for the most-active contract since Sept. 24 when it closed at $1,540.20, according to FactSet data.
March silver SIH20, -0.86%, meanwhile, shed 4.7 cents, or 0.3%, to settle at $17.943 an ounce, a day after marking its highest settlement since Nov. 4, just below a psychologically important level at $18.
For the week, gold rose 2.45%, its sharpest weekly climb since early August, while silver gained nearly 4%, also its best week since August.
“Gold has passed the phase one trade deal test with flying colors. So that is at minimum mildly bullish for gold,” wrote Stephen Innes, chief Asia market strategist at AxiTrader in a daily note.
The yellow metal has been gaining partly on the back of upbeat signs from the Sino-American trade war, with the U.S. and China moving toward an apparent partial resolution — a potential positive sign for gold because China represents one of the biggest buyers of precious metals.
Gold also has rallied at the same time as U.S. stocks, which on Friday saw all three major equity benchmarks hit fresh intraday records.
“The past several weeks have seen the geopolitical front quiet, which has diminished trader and investor worries and uncertainties, and has allowed world stock markets to continue to drift higher,” wrote Jim Wyckoff, senior analyst at Kitco.com, in a note Friday.
“This lull won’t go on indefinitely and veteran market watchers are pondering the next major event to disrupt the calm,” he said.
Meanwhile, weakness in the U.S. dollar also has helped to bolster bullion prices. As measured by the ICE U.S. Dollar Index DXY, -0.53%, was down 0.4% on Friday, with a decline of 0.6% over the past week. A weaker dollar can help to fuel gold buying, which can draw buyers using other currencies when the buck weakens.