Gold prices rose to their highest level in more than six weeks, as investors remain cautious about the world economy and geopolitics despite record highs in the U.S. stock market.
Front-month gold futures rose 0.5% to $1,482.50 a troy ounce on Monday in New York, extending their advance in December to 1.2%. The haven metal is on track to rise 16% over the course of 2019, which would be its biggest one-year rally since 2010.
“The fact that investors are still holding a decent chunk of gold gives you a good feeling as to how they are literally hedging their bets,” said Altaf Kassam, head of investment strategy for State Street STT 0.28% Global Advisors in Europe, the Middle East and Africa. “Gold is definitely not looking like a bad place to store some value or have a hedge.”
Gold prices have kept climbing in recent weeks even though improving economic data and President Trump’s provisional trade deal with China have pushed U.S. stocks to a series of all-time highs. The yield on 10-year U.S. Treasury notes has also risen, from 1.778% at the end of November to 1.934% Monday. Higher bond yields typically make gold, which pays no interest, less attractive for investors to own.
Gold’s resilience shows that the limited trade pact—which Washington and Beijing haven’t so far signed—hasn’t dispelled concerns about the outlook for global growth. China’s Finance Ministry said Monday that Beijing would cut import tariffs on a range of goods in 2020, as the two sides attempt to complete their so-called phase-one agreement.
“Worries about the state of geopolitics and the world in general haven’t really gone away completely,” said Rhona O’Connell, head of market analysis for EMEA and Asia at INTL FCStone. “There is still some concern about the fact the deal is yet to be signed,” she said.
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