Gold rises as metal breaks out above point of resistance at $1,480, technical analysts says

New York (Dec 23)  Gold prices climbed on Monday to begin a shortened week of holiday trade, which has taken the precious commodity above a level of technical resistance that could signify further gains ahead, strategists say.

“Indeed, gold has broken above the pivotal $1480/81 level today, which means the path of least resistance is now to the upside again,” wrote Fawad Razaqzada, technical analyst at Forex.com, in a Monday research report.

Gold for February delivery GCG20, +0.36%  on Comex picked up $5.80, or 0.4%, to trade at $1,486.40 an ounce, after posting a 0.02% weekly decline on Friday. March silver SIH20, +1.05%  tacked on 17 cents, or 1%, to trade at $17.39 an ounce, following a 1.25% weekly gain at last Friday’s settlement.

Gold is up 16% so far this year, while silver is has climbed 11.8% thus far in 2019, according to FactSet data.

Gold and silver have made unusual moves of late, rising in tandem as the Dow Jones Industrial Average DJIA, +0.28% and the S&P 500 index SPX, +0.49% have climbed to all-time highs. Rallying equities tend to signify heightened appetite for assets considered risky, which can undercut demand for haven metals.

Equity benchmarks have been on a steady, nearly unimpeded rise to close out 2019 as the Federal Reserve has delivered easier monetary policy and as the U.S. and China have made apparent progress toward ending a more than yearlong trade disagreement.

Both developments, however, could provide a lift for the yellow metal even if it also boosts equities because easing trade tensions between the world’s largest economies can mean increased demand for bullion and sliver.

“With China being one of if not the largest gold consumer, this implies increased demand from this important market, especially ahead of the Lunar New Year when gift jewelry purchases tend to rise” wrote Razaqzada.

Moreover, stimulus from the world’s central banks also has helped to keep rates lower and provide a floor for prices of precious metals.

Still, some investors see gold’s steady values as a sign of some hesitation for investors hedging their risk and repositioning their portfolios heading to the New Year.

“While part of that may be year-end flows and rebalancing by major funds, it could also be a sign that investors are hedging some of their risk exposure, nervous that next year may be just as turbulent as this one amid a fragile trade truce and US election uncertainty,” wrote Marios Hadjikyriacos, investment analyst at XM.com.

In other metals trading, January platinum PLF20, +0.38%  added $5.60, or 0.6%, at $919.40 an ounce, after a weekly fall of 1.6%. March palladium PAH20, +1.00%  advanced $19, or 1.1%, to $1,827.90 an ounce, after marking a weekly decline of 4.4%.

March copper HGH20, -0.14%  was little changed at $2.8060 a pound on Monday. The industrial metal gained 0.9% last week.

MarketWatch

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