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Gold Up Near $1,300 as Wall Street Rally Snaps

Investing.com - Gold's flirt with $1,300 may have been a little too brief, but the yellow metal should be reunited with its desired price target soon as the rally in equities stalls and global macro and political risks rise to the fore, analysts say.

Gold futures for February delivery on the Comex division of the New York Mercantile Exchange settled up $2.10, or 0.2%, at $1,289.50 a troy ounce. The high for the day was $1,295.70.

The spot price of gold was also up $2.10, or 0.2%, at $1,288.58 by 2:27 PM ET (19:27 GMT). The yellow metal climbed as U.S. stocks edged lower on Friday on profit-taking after a five-day rally.

Gold broke through the key $1,300 level in Jan. 4 intraday trading, reaching a near 7-month high of $1,300.40, before sliding back on profit-taking.

"We may have gold back at $1,300 area sooner than we think," George Gero, precious metals analyst at RBC Wealth Management in New York, said as futures on Comex came within $5 of testing the resistance.

"Central banks from China to Russia are buying gold to compensate for their falling currencies," Gero said. "You also have benign 10-year Treasury rates, a stock market that's losing upward momentum from a Fed patient with rate hikes, and rising tensions from the partial U.S. government shutdown to Brexit problems in Europe."

Walter Pehowich, executive vice-president at Dillon Gage Metals in Addison, Texas, pointed to another worry: China.

U.S and Chinese trade delegations holding talks in Beijing wrapped up three days of discussions on Friday without any concrete announcements, sapping the market of the initial euphoria that a trade deal might be announced. The two countries have until March 1 to make good on a deal before a deadline comes into effect that will hypothetically bring additional tariffs on $200 billion worth of Chinese goods.

U.S. officials to the talks said any agreement struck with Beijing must provide complete "verification and effective enforcement", with Chinese officials responding that “both parties” had an obligation to keep their promises. "To say that both parties don’t trust each other would be an understatement," said Pehowich.

In other Comex trading, palladium futures settled up $5.50, or 0.4%, at $1,278.70. Spot palladium, which hit a record high of $1,341.40 on Wednesday, was down $5.10, or 0.4%, at $1,320.

Platinum futures was down $9.80, or 1.2%, at $816.30 by 2:32 PM ET (19:32 GMT).

Silver futures was flat at $15.64.

In base metals, copper rose 0.7% to $2.66 per pound.

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