December 24, 2019 / 10:57 AM / a month ago

PRECIOUS-Gold scales 1-1/2 month peak on sombre U.S. economic data

 (Adds comment, updates prices)
    * Silver hits highest since Nov. 7
    * Palladium rebounds from near 1-month low
    * GRAPHIC-2019 asset returns: tmsnrt.rs/2jvdmXl

    By K. Sathya Narayanan
    Dec 24 (Reuters) - Gold prices rose to their highest in more
than 1-1/2 months on Tuesday, as equity markets steadied after a
record rally and weak U.S. data improved demand for bullion in
subdued trading ahead of the holidays.
    Spot gold        was up 0.3% at $1,489.75 per ounce by 1233
GMT, having earlier hit $1,492.79, its highest since Nov. 6. 
    U.S. gold futures         rose 0.4% to $1,493.90.
    Data on Monday showed new orders for key U.S.-made capital
goods barely rose in November and shipments fell, suggesting
business investment will probably remain a drag on economic
growth in the fourth quarter.             
    "There is a pause in the rally in riskier assets and that is
why we are seeing gold and the dollar move higher," Vandana
Bharti, assistant vice-president of commodity research at SMC
Comtrade said, adding weak U.S. economic data added to bullion's
safe-haven appeal.       
    World stocks flatlined near record highs on Tuesday.
           
    Gold, an alternative investment during times of economic and
political uncertainties, has risen about 16% so far this year
due to U.S.-China trade tensions and dovish global central
banks, with the Federal Reserve cutting rates three times in
2019.
    "Gold was in a range and trading with a downside bias
because of the positive outcome in the China-U.S. trade deal,
but it is now discounted in the market," SMC's Bharti said.
    Even as Beijing and Washington have taken steps to defuse
their dispute, they still diverge on a slew of issues, including
anti-government protests in Hong Kong and the treatment of
China's Muslim Uighur minority.             
    Investors are currently awaiting further information on the
Phase One trade deal between the world's two biggest economies.
    "Any further positivity with regard to the U.S.-China
situation would have marginal impact (on gold)," said Fawad
Razaqzada, market analyst with Forex.com.
    Any negative trade news would increase safe-haven demand for
bullion, while an agreement would strengthen the Chinese yuan
and make greenback-denominated gold relatively cheaper in China-
the world's top consumer of the metal, he added.
    Elsewhere, silver        rose 0.9% to $17.58 per ounce,
having earlier hit its highest since Nov. 7 at $17.65.
    Deficit-hit Palladium        gained 0.4% to $1,883.82 per
ounce, having slipped to its lowest since Nov. 27 in the
previous session, while platinum        inched up 0.4% to
$939.76.

 (Reporting by K. Sathya Narayanan in Bengaluru; Editing by Mark
Potter and Louise Heavens)
  
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