Gold again flirted with multiyear highs hit earlier this week on Friday morning, as Italian political jitters and another wrinkle in the U.S.-China trade talks sent investors scampering into safe haven assets.
“Risk aversion spikes again on reports U.S. won’t ease Huawei restrictions,” said Raffi Boyadjian, analyst with the brokerage XM, speaking of the Chinese technology firm that has featured in trade talks.
“Safe-haven favorites such as the yen and gold headed higher… Gold moved back toward Wednesday’s six-year peak,” he said.
Early Friday, December gold GCZ19, -0.05% on Comex was up $4, or 0.3%, at $1,513.50 an ounce. Its finish Thursday at $1,509.50 marked the highest level for the precious metal since 2013 based on most-active contracts, according to Dow Jones Market Data. The metal is headed for roughly 3.8% gain for the week.
Meanwhile, September silver SIU19, -0.04% rose 5 cents, or 0.3%, to $16.985 an ounce. The contract finished at $16.936 Thursday, following the metal’s sharpest one-day gain on a point basis since Sept. 6, 2016 and since July 2016 on a percentage basis, according to FactSet data.
Metals have mostly benefited from trade-related weakness in equity markets as investors eschew assets perceived as risky in favor of those considered safe havens like gold and sovereign debt with yields tumbling to historic lows. The slide in government debt to ultra-low and negative rates has helped to buttress bullion and silver, which don’t bear a coupon but tend to rally in times of uncertainty.
Italy Deputy Prime Minister Matteo Salvini called for a snap election on Friday, with the political instability in the EU’s third largest economy send European stocks and bond yields lower.
The U.S. 10-year Treasury yielded just around 1.70% early Friday, while comparable German bonds TMBMKDE-10Y, -3.62%, a proxy for the health of eurozone economy, were at negative 0.579%, hovering near a record low. Key U.S. yields this week hit the lowest level since October of 2016.
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