Gold prices jumped past a three-month high Tuesday, extending the bullion's best run in more than six years as investors dumped the U.S. dollar and continue to ride the global rally in metals prices.
The price of gold for immediate delivery, also known as spot gold, was marked 0.63% ahead of its Friday close and changing hands at $1,311.55 an ounce by mid-day in London after hitting a Sept. 26 high of $1,312.95 earlier in the session. The gains extend the bullion's run to eight consecutive sessions, the longest winning streak since 2011.
COT on #commodities in the week to Dec 26 (incl Bitcoin). Record crude #oil long hits 977k lots. #Gold bought for a second week. Record #grains short expanded further. pic.twitter.com/5daTdS9LXG
- #SaxoStrats (@SaxoStrats)January 2, 2018Metals prices around the world have been booking solid advances over the final weeks of 2017 as investors bet on a surge in demand amid increasing evidence that the global economy will continue its robust rate of growth into the new year.
Copper prices traded at a near four-year high of $7,260 per ton on the London Metals Exchange, easing modestly after a 2017 run that has lifted the industrial metal more than 30% on renewed strength in China's manufacturing sector, which is the world's biggest consumer of industrial metals and accounts for nearly half of global purchases. China's factory output pace hit a four-month high in December, according to the Caixin/Markit PMI data published Tuesday.
Want to know what drives metal prices? Look no further #China pic.twitter.com/cotANVtkYx
- Peter Vanden Houte (@PVandenHoute)January 1, 2018The gains also come amid the worst year for the U.S. dollar since 2003 as as investors shunned the greenback in favor of rival currencies amid diverging bets on growth rates in the coming year.
The dollar index, which benchmarks the greenback against a basket of six global currencies, was marked 0.3% lower from its New Year's Eve close at 91.96 in early trading , the lowest level since mid-September and 1.5% down from where it changed hands just prior to the Christmas break and 9.8% lower than this time last year.
The CME Group's FedWatch tool suggests traders are only pricing in a 56.2% chance of a rate hike for the Federal Reserve's March 21 policy meeting, a relatively low level of probability given that most market participants think newly-appointed Chairman Jerome Powell will orchestrate at least three hikes over the course of 2018.
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