Gold Prices Rally Above $1,310, Palladium Hits Record Highs
(Kitco News) - Gold prices continued to rally during after-hours trading on Tuesday, while palladium surged to a record high, as weaker U.S. dollar provided additional support for the precious metals.
Spot gold on Kitco.com was last trading at $1,317.20 per ounce, up 1.13% on the day. Spot palladium was at $1,086.00 per ounce, up 3.13% on the day, after almost hitting $1,090 earlier in the session.
A softer U.S. dollar was key in driving precious metals’ prices higher on Tuesday, according to analysts, who see gold heading higher this week.
“With the dollar stumbling into the New Year under renewed selling pressure, Gold is likely to remain heavily supported, with prices potentially appreciating towards $1320 this week,” said Lukman Otunuga, research analyst at FXTM.
“The decisive breakout above $1,300 has opened a path higher towards $1,320. With today being the first trading day of 2018 and gold already off to a strong start, it will be interesting to see if the upside momentum elevates the metal beyond $1,320 this month,” Otunuga added.
Kitco’s senior technical analyst Jim Wyckoff pointed to a slumping U.S. dollar index, which hit a more than three-month low on Tuesday as a reason for the bullish momentum in the precious metals. The U.S. dollar index was last seen at 91.83, down 0.43% on the day.
Wyckoff noted that the gold market saw additional support coming from heightened geopolitical risks.
“A feature in the marketplace early this week are rising tensions in Iran as demonstrators in that country are demanding an overthrow of the ruling government. There has been a violent crackdown on the demonstrators by the Iranian government. U.S. President Donald Trump has tweeted that he supports the demonstrators, which is a dramatic shift from the Obama administration that was much more low key on such matters,” Wyckoff wrote in his PM recap. “If this situation deteriorates further, look for more safe-haven demand for gold and silver.”
On the other hand, analysts highlighted fears of short supply when it came to explaining the surge in palladium prices.
“Palladium continues to rally on real demand and supply tightness,” Miguel Perez-Santalla, vice president of Heraeus Metal Management in New York, said in a note to clients on Tuesday.