Metals Stocks: Gold prices edge back from 3-month peak, but on track for double-digit annual gain

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Gold prices headed slightly lower on Monday but were holding near the highest level in about three months as investors got ready for the end of 2019 with less than 48 hours remaining in trade.

Bullion’s value has been partially supported by apparent progress toward a scaledown of the Sino-American trade war but fears that President Donald Trump’s administration may scuttle any partial agreement at the last minute have helped to draw bids and limit losses for haven metals, market experts said.

Chinese Vice-Premier Liu He is set to travel to Washington on Saturday, where he is expected to sign the limited trade deal agreed to earlier this month with the Trump administration, the South China Morning Post reported Monday.

“It is only fears of Trump withdrawing from the trade deal that is preventing gold and silver from a crash,” wrote Chintan Karnani, chief market analyst at Insignia Consultants, in a Monday research report.

Gold for February delivery GCG20, -0.03%  on Comex edged back $2.70, or 0.2%, at $1,515.60 an ounce, after the metal touched its highest level for the most-active contract since Sept. 24 when it closed at $1,540.20, according to FactSet data. The yellow metal also notched a 2.45% weekly gain.

March silver SIH20, -0.02%, meanwhile, shed 3 cents, or 0.2%, at $17.910 an ounce, after last week logging a 4% advance for gold’s sister metal.

For the year, gold is on track to gain 18.3%, while silver is on pace for a 15.3% return thus far in 2019. Gold usually moves in the opposite direction of assets considered risky like stocks but the metal has enjoyed a strong year. By comparison, the Dow Jones Industrial DJIA, -0.36%  has gained about 23% so far this year and the S&P 500 index SPX, -0.41% has risen more than 29% over the past 12 months.

Gold and other dollar-pegged commodities have benefited from some weakness in the U.S. dollar over the past three months. One measure of greenback, the ICE U.S. Dollar Index DXY, -0.19%, a gauge of the buck against a half-dozen rivals, has declined 2.6% over the quarter, despite its 0.7% year-to-date gain. A weaker dollar can make assets priced in the currency more attractive to buyers using other monetary units.

Elsewhere on Comex, April platinum PLJ20, +0.51% added $3.30, or 0.3%, at $959.90 an ounce, while March palladium PAH20, -0.37%  shed $6.10, or 0.3%, to trade at $1,875.10 an ounce. Meanwhile, high-grade copper for March HGH20, -0.12% picked up less than 0.1% at $2.831 a pound.

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