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#1 02-01-2020 10:27:52

johnedward
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XAU/USD: Solid year's end for gold, which climbs back above $1,500

XAU/USD: Solid year's end for gold, which climbs back above $1,500


The price of gold experienced a multi-day winning streak, its longest in about 5 months, while hovering near a quarterly high as investors prepared for the end of the year with only trading day remaining.

The value of the bullion was partly supported by apparent progress toward a reduction in the China-US trade war, but fears that President Trump could scuttle any partial deal at the last minute helped attract bids and limit losses for the safe haven metals, market experts say.

China's Vice Premier Liu He is scheduled to travel to Washington this coming weekend, where he is expected to sign the limited trade deal reached earlier in December with the Trump administration, the South China Morning Post reported earlier this week.

"It is only fears of Trump's withdrawal from the trade deal that is keeping gold and silver from collapsing," Chint Karnani, market analyst at Insignia Consultants, writes in a research report released earlier this week.

Gold soared 18.5% in 2019

Gold also found some support after the US administration warned of possible "further action" following US military air strikes in Iraq and Syria on Sunday against an Iran-backed militia that was accused of killing a US civilian contractor on an Iraqi military base.

"Another factor contributing to the gold rally is the US air strikes in Iraq and Syria against Iranian-backed groups," Luke Otunuga, research analyst at FXTM, says in a note issued 3 days ago.

Gold and other dollar-denominated commodities have benefited from some weakness in the USD over the past few months. A measure of the USD, the dollar-denominated ICE Index, an indicator of the dollar's value against half a dozen rivals, fell 2.7% in the quarter, despite its 0.5% gain since the beginning of 2019. A weaker dollar can make assets valued in the currency more attractive to buyers using other currency units.

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