Gold futures posted their highest close in more than three months on Monday, as the yellow metal extended its gains from the prior week amid bets for a further delay in U.S. interest-rate hikes.
Gold for December delivery settled $8.60, or 0.7%, higher at $1,164.50 an ounce on Comex for its highest settlement since July 6, when the precious metal finished at $1,173.20. Meanwhile, December silver tacked on 4 cents, or 0.2%, to finish at $15.86 an ounce.
Last week, gold gained about 1.7% and scored its highest settlement since Aug. 21.
Jim Wyckoff, senior analyst at Kitco, said he believed gold gains have partially been fueled by haven buying amid Russia’s bombardment on opponents of Syrian President Bashar al-Assad’s regime.
“The Russian military action in Syria [helped foster some] bullish safe-haven buying and it probably caused some already nervous shorts to close some positions,” Wyckoff said. He also noted that precious metals and raw commodities might be seeing some signs of a rebound.
“It is too early to say with any conviction but there are some green shoots out there,” he said.
Investors believe that if gold can break ahead of $1,169 an ounce, that it could make a run at $1,200 an ounce—a level gold hasn’t seen since March.
Against the backdrop of low rates and an uncertain political environment, gold has enjoyed a rebound because it doesn’t yield interest and competes more easily against assets that do, like Treasurys, when rates are pinned near zero. Investors have interpreted Federal Reserve minutes that were released on Thursday as providing further proof that U.S. interest rates may remain on hold for the rest of 2015.
Weakness in the dollar which was wavering in Monday trade, has helped give gold a lift. A stronger greenback can weigh on dollar-denominated commodities like gold because it makes them pricier for holders of other currencies.
Elsewhere on the Comex, December high-grade copper picked up a penny, or 0.4%, to settle at $2.42 a pound. January platinum advanced $14.50, or 1.5%, to $995.90 an ounce, while December palladium closed $13.50, or 1.9%, lower at 694.65 an ounce.
Written by Mark DeCambre and Victor Reklaitis of MarketWatch