By Geoffrey Smith
Investing.com — Gold prices joined a melt-up in global markets on Friday as signs of an upturn in the Chinese economy and more solid U.S. figures triggered a rally across almost risk assets.
Once again, prices moved inversely to bond prices, with which gold usually enjoys a high correlation.
By 1025 AM ET (1525 GMT), for delivery on the Comex exchange were up 0.3% at $1,555.75, while was up 0.3% at $1,555.77.
By contrast, prices for U.S. Treasury debt with a maturity of more than two years were all lower, sending yields higher by as much as four basis points at the long end of the yield curve.
Gold may have benefited from the broader rise in precious metals, with platinum and palladium once again posting sharp gains on concerns about supply from South Africa, where the state electricity monopoly’s inability to operate reliably has distressed the mining industry.
rose 2.7% to $1,028.65 an ounce, while hit a new all-time high of $2,279.25 an ounce before retracing to $2,276.95, still up 4.6% on the day.
Demand for the two metals has also been helped by data showing a big jump in European car registrations at the end of last year: platinum and palladium are both used in catalytic convertors in internal combustion engines. However, the data were heavily distorted by discounting so as to clear as much old stock as possible before tighter new emission rules came into force in the EU at the start of the year. As such, December’s data may have merely brought forward demand that would naturally have been seen in 2020.
There was little in the day’s economic data – outside of the U.K. – to suggest the imminence of any interest rate cuts that would support further gold buying. U.S. housing starts hit their highest level in 13 years in December, while the University of Michigan’s consumer sentiment index edged down only slightly and U.S. manufacturing production posted a surprise increase.
More notably, Chinese data earlier in the day had hinted strongly at a bottoming out of the economy, with industrial production growing at its fastest rate since April in December.
Elsewhere in the metals spectrum Friday, rose 0.3% to $17.98 an ounce, while continued to drift around the $2.86 a pound mark.
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.
Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.