Gold rallies to an 8-month high

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January 29, 2019 11:33am NYSE:GLD

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From Myra P. Saefong: Gold futures on Tuesday headed higher for a third straight session as haven support from geopolitical risks helped the metal shake off pressure from some gains in global stock markets and a steady dollar.

Bullion’s ascent comes on the first day of the Federal Reserve’s two-day policy meeting that is likely to signal a central bank that appears inclined to dial back a seemingly aggressive path of rate increases– a potentially bullish development for precious metal prices that don’t offer a yield.

Read: Fed to stress patience and that means no interest-rate move until at least June

Trading volume was mostly split among the two most-active gold contracts. Gold for February delivery GCG9, +0.45%  on Comex, was up $5.80, or 0.5%, at $1,308.90 an ounce. April gold GCJ9, +0.46% traded at $1,315.90, up $5.60, or 0.4%. Both were trading at their highest levels since June.

“Gold took some time but it finally broke away from $1,300 as a dovish Fed and global growth concerns continue to be the dominant narrative on Wall Street,” wrote Edward Moya, market analyst at Oanda, in a Tuesday research note.

The Fed has penciled in two quarter-point rate increases this year, down from an early estimate of three, although officials have stressed the moves aren’t set in stone. So far in 2019, after the December market turmoil, many Fed officials have emphasized that the central bank intends on being “patient” in its policy normalization plans. That could create a felicitous atmosphere for gold and other precious metals to clamber higher, commodity experts have said.

Meanwhile, March silver SIH9, +0.60%  added 10 cents, or 0.6%, at $15.865 an ounce.

The U.S. dollar, which influences gold prices because the commodity tends to be priced in the currency, was holding steady. As measured by the ICE U.S. Dollar Index DXY, +0.08% a gauge of the buck against a half-dozen monetary units, the dollar was little changed at 95.773 on Tuesday.

European stocks climbed, though U.S. benchmark stock indexes were mixed in morning dealings.

“Rising geopolitical risk factors” have helped to boost appetite for gold, said Lukman Otunuga, research analyst at FXTM.

“With Brexit-related uncertainty, U.S.-China trade developments and global growth fears draining risk sentiment, gold is likely to continue glittering ahead of the FOMC statement,” he said. The statement on monetary policy is due Wednesday.

Other metals traded on Comex moved higher, with March copper HGH9, +1.23% up 1.3% at $2.716 a pound. April platinum PLJ9, +0.39%  added 0.3% to $817.30 an ounce, while March palladium PAH9, +1.56%  traded at $1,307.80 an ounce, up 1.4%, and trading close to the per-ounce price of gold.

Among exchange-traded funds, the SPDR Gold Shares GLD, +0.46%  rose 0.3%, the iShares Silver Trust SLV, +0.54%  added 0.5% and the VanEck Vectors Gold Miners ETF GDX, +1.75% climbed by 0.9%

The SPDR Gold Shares (GLD) was trading at $123.82 per share on Tuesday morning, up $0.53 (+0.43%). Year-to-date, GLD has gained 0.14%, versus a -1.14% rise in the benchmark S&P 500 index during the same period.

GLD currently has an ETF Daily News SMART Grade of B (Buy), and is ranked #1 of 35 ETFs in the Precious Metals ETFs category.

This article is brought to you courtesy of MarketWatch.

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