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PRECIOUS-Gold at 3-month peak; set for biggest annual rise since 2010

Published 01/01/2020, 12:26 am
Updated 01/01/2020, 12:28 am
© Reuters.  PRECIOUS-Gold at 3-month peak; set for biggest annual rise since 2010
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(Updates prices)

* Gold up about 19%, silver up 16% year to date

* Palladium up over 50% this year, biggest precious metal gainer

* Platinum set for best year since 2009

* GRAPHIC-2019 asset returns: http://tmsnrt.rs/2jvdmXl

By Diptendu Lahiri

Dec 31 (Reuters) - Gold rose to its highest in more than three months on Tuesday as a weak dollar encouraged investors to buy the safe-haven asset, with the metal set to post its biggest yearly gain since 2010.

Scarcity-hit palladium was on track to surge more than 50% in its fourth straight yearly gain.

Spot gold XAU= hit its highest since Sept. 25 at $1,525.20 and was up 0.4% to $1,520.73 per ounce by 1306 GMT. U.S. gold futures GCcv1 rose 0.3% to $1,523.60.

"There are still a lot of uncertainties that we are taking into 2020, we don't know where the (China-U.S.) trade war is going, the tension around the Iran issue is also not helping," said Afshin Nabavi, senior vice president at precious metals trader MKS SA.

"I see gold being supported in 2020 as well, until questions around all uncertainties have an answer," he said, adding investors were banking more on gold as a safe-haven asset than the dollar.

The dollar .DXY slipped against a basket of rivals, hovering close to a 6-month low hit last week, making gold cheaper for holders of other currencies. USD/

Investor interest in gold has surged this year due to a raft of geopolitical uncertainties, including the China-U.S. trade war, Middle East tensions and protests in Hong Kong.

Bullion was also supported by rate cuts by major central banks, including the U.S. Federal Reserve cutting three times before it signalled it would keep rates unchanged through 2020. interest rates reduce the opportunity cost of holding non-yielding bullion.

Elsewhere, palladium XPD= advanced about 1% to $1,924.37 per ounce, extending gains into a fourth straight year.

Prices have jumped over 52% this year, the most since 2017, which would make palladium the biggest gainer among precious metals this year.

"The physical supply of palladium seems to be pretty scarce, though we saw a quick correction when it could not hit the $2,000 level, but sentiment is still positive and that level is not far away," Nabavi said.

Silver XAG= rose 0.6% to $18.02 an ounce and was on course for its best year since 2010, rising about 16%.

Platinum XPT= 1.4% to $971.10 an ounce and was set to gain about 23% for the year in its biggest advance since 2009.

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