Singapore: Gold advanced to a four-week high on the dollar’s slump and haven demand before Donald Trump takes office. Palladium rose for a fifth day, the longest rally since 10 November.
Bullion for immediate delivery gained as much as 1.3% to $1,179.12 an ounce, the highest since 7 December, and traded at $1,176.65 at 3.16 pm in Singapore, according to Bloomberg generic pricing. The Bloomberg Dollar index dropped 0.7 percent, the biggest decline since Sept. 21.
Gold is recovering from the worst quarterly slump since 2013 as minutes from the Federal Reserve’s December meeting showed officials were grappling with uncertainties about Donald Trump’s policies and the possible impact on US economic growth. Gold usually moves in the opposite direction of the dollar.
“There is a sense of ‘reality bites’ now as Trump’s protectionist agenda becomes clearer and he’s only two weeks away from getting the keys to the White House,” Jeffrey Halley, senior market analyst at Oanda Corp. in Singapore, said by e-mail. “Technically, gold has well and truly broken out of its recent down channel.”
Silver, platinum and gold have climbed in the first three trading days of 2017, while palladium is up 10% this year on an improving outlook for demand from carmakers, which use the metal in catalytic converters.
Capital outflows from China accelerated in recent months as the yuan suffered its worst year of losses against the dollar since 1994. About $760 billion left the country in the first 11 months of 2016, according to a Bloomberg Intelligence gauge.
“Looking at capital outflows from the Chinese, it would not surprise me in the least if some of it was going into gold,” Halley said.
Investors continue to exit bullion-backed exchange-traded funds. Global ETF holdings fell 1.1 metric tons to 1,771.4 tons as of Wednesday, the lowest since May.