NEW YORK/LONDON: Gold extended its rally to a three-month high on Friday, leaping toward its biggest one-year rise in seven years as a wilting U.S. dollar, political tensions and receding concerns over the impact of U.S. interest rate hikes fed into its rally.
Gold’s gains coincide with the greenback, in which gold is priced, sliding toward its worst year since 2003, damaged by tensions over North Korea, the Russian scandal surrounding U.S. President Donald Trump’s election campaign, and persistently low U.S. inflation.
The dollar index touched three-month lows on Friday, lifting bullion to its highest level since late September at $1,307.60 an ounce before paring gains.
Spot gold prices were up 0.67 percent at $1,303.37 per ounce by 2:05 p.m. EST (1905 GMT), poised to finish 2017 up 13 percent. Benchmark U.S. gold futures settled up $12.1, or 0.93 percent, at $1,309.30 per ounce, finishing the year 12 percent higher.
Gold’s chart signals look positive after it broke above its 100-day moving average this week at $1,295 an ounce, Scotomata’s technical team said in a note, pointing to a target of October’s high at $1,306.
Among precious metals, palladium posted the strongest rise this year, climbing 57 percent as concerns grew over availability after years of deficit.
Palladium eased 0.31 percent to $1,062.05 an ounce, having hit its highest level since February 2001 at $1,072 in the previous session. It has held in a historically unusual premium to platinum this quarter.
Silver was up 0.51 percent at $16.926, paring gains from a one-month high of $17.111. Platinum was up 0.11 percent at $924 after touching a four-week high of $936.20. This year, the two metals have risen by 6 percent and 3 percent, respectively.