Investing.com - Uncertainty is back across financial markets.
Gold bugs are loving it.
From serious doubts about Brexit and UK Prime MInister Theresa May keeping her job to skepticism about a US-China trade deal happening on the sidelines of the G20 meeting, risk-off is in the air. And that’s pushing investors toward safe havens, particularly the yellow metal.
But there’s a caveat with gold, too. This week being a holiday-shortened stretch could see thin volumes from traders on extended break after Thursday’s Thanksgiving or still traveling back to base on Friday. That might make them skittish of taking outsized positions ahead of the holiday.
“Gold is seeing a most uncertain week, with open interest in options very high at nearly 1.5 million contracts while Brexit headlines, uncertainty over trade talks and the G20, and the Thanksgiving holiday all come together at once,” said George Gero at RBC Wealth Management in New York.
COMEX gold futures for December delivery settled up $2.10, or 0.2%, at $1,225.30 per troy ounce, after a session high at $1,225.90.
Last week, December gold rose 1.4% for its best weekly gain in five as hedgers rushed to the relative safely of bullion after the pounding taken by sterling from Britan's EU-exit woes.
After her unpopular Brexit draft unveiled earlier in the week, May was battling to halt a growing revolt from the Tory right as attempts for a no-confidence vote against her builds.
The U.K. political drama aside, gold was also propped up by flagging hopes for a US-China trade settlement after a senior Trump administration official was quoted by Reuters that Beijing's written response to U.S. demands, received last week, was unlikely to result in a deal.
Also providing some wind to gold late last week were dovish comments by some Federal Reserve speakers that cast some doubt on the central bank’s commitment to raise interest U.S. rates again next month, for the fourth time this year.
TD Securities said in a note on gold that some speculators were still building short positions in the yellow metal and the dollar might ultimately decide for bullion.
“We maintain the view that a fundamental shift in the strong dollar regime will be needed before gold can break materially higher,” it said.
The dollar index, a contrarian bet to gold, was steady at 96.35 in Monday’s Asian trade, not far from the 16-month highs of 97.53 hit a week ago.
Among other precious metals on COMEX, silver slipped 0.2% to $14.35 per ounce.
Palladium slid 1.1 % to $1,141.40 per ounce, while sister metal platinum rose 0.9% to $854.
In base metals, COMEX copper declined 0.5% to $2.79 per pound.