Metals Stocks: Gold hovers at 1-month high as latest win streak is extended

Gold futures prices trudged higher Thursday, trading at a one-month high after gaining in all but two sessions over the past two-plus weeks.

Copper, fueled by hopes for strong 2018 demand from top consumer China, continued its run higher, trading at four-year highs.

Metals rose as a leading dollar index DXY, -0.32%   fell, making dollar-priced gold more attractive to investors using another currency. An expected upbeat stock session, led by higher oil prices, could limit the appeal of haven gold, however.

Read: Take off the bitcoin blinders, here are the big investments to watch for 2018

February gold GCG8, +0.07% the most active contract on Comex, rose $2.90, or 0.2%, to $1,294.30 an ounce. It settled at $1,291.40 Wednesday. Gold had not settled higher since Nov. 28, when the metal ended at $1,294.90, according to FactSet data. A string of six-straight gains matches a winning streak of that length last seen in the third week of July.

Gold futures are headed for a nearly 12% gain this year, although that performance pales next to the 20% to 30% gain for major stock indexes as risk-on sentiment dominated the year.

The gold-focused exchange-traded SPDR Gold Trust GLD, +0.38%  rose 0.4%, while the VanEck Vectors Gold Miners ETF GDX, -0.17%  slipped 0.1%.

Falling U.S. bond yields were cited as one reason for dollar weakness and gold strength on Thursday. On Wednesday, the yield for the benchmark 10-year Treasury note TMUBMUSD10Y, +0.90%  logged its biggest one-day drop in more than three months and it remained under pressure.

”The flattening of the yield curve has triggered concerns that investors are possibly pricing in a slowing of the economy or even a recession and while this has historically happened on such expectations, I’m not convinced this is the case this time,” said Craig Erlam, senior market analyst, with Oanda.

“Given the current environment, it’s possible that this is more a reflection of longer term interest rates and the low inflation environment than the economic prospects,” he said. “Still, if yields on long term U.S. debt don’t rise or even fall as the Fed raises interest rates, it could fuel fears of an impending recession,” which could prove supportive for gold.

More clues on the economy will be found in the weekly jobless claims report, due at 8:30 a.m. Eastern Time, which is forecast to show 239,000 Americans filed for unemployment benefits last week, down from 245,000 the week before. Data on advance trade in goods for November are out at 8:30 a.m. Eastern as well, followed by the purchasing managers index for Chicago at 9:45 a.m. Eastern.

Copper prices remained at four-year highs Thursday, reflecting bets on strong demand from China, which accounts for about half of global demand at 23.5 million metric tons, and amid reports of supply disruptions in top producer Chile, according to Reuters.

March copper HGH8, +0.65% futures rose 0.5% to $3.2995 a pound. On Wednesday, it settled at $3.2840 a pound, the highest level since December 2013. The asset on Thursday looked to extend its streak to 15-straight higher sessions, according to FactSet data.

On global markets, benchmark copper on the London Metal Exchange earlier hit $7,312.5 a metric tone, its highest since January 2014. It is up more than 30% so far this year.

The metal is used widely in the power and construction industries, with gains often used by market participants as a gauge of the health of the global economy.

In addition to Chinese demand, political success with changes to the U.S. tax code have raised expectations that President Donald Trump’s administration will be able to enact a bill to boost infrastructure spending, feeding the appetite for industrial metals, market participants said.

In other metals, March silver SIH8, -0.10% rose 2 cents, or 0.1%, to $16.775 an ounce.

March palladium PAH8, -0.41%  fell $2.05, or 0.2%, at $1,054.30 an ounce. January platinum PLF8, +0.19% meanwhile, added $1.90, or 0.2%, to $925.60 an ounce.

Read: How palladium and lumber defied the 2017 commodity slump

And: Here’s how oil, industrial metals could trade in 2018

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