Gold prices resumed a push higher on Monday, as flows into the precious metal continued on improved prospects for easier monetary policy from the Federal Reserve and other central banks.
August gold GCQ19, +0.71% GCQ19, +0.71% rose $12.60, or 0.9%, to $1,412.60 an ounce, nearing session highs of $1,414.80 an ounce. On Friday, gold settled above $1,400 an ounce for the first time since Sept. 3, 2013, according to FactSet. The contract rose 0.2% to finish at $1,400.10 an ounce, and gained 4.1% for the week.
Read: Why gold prices have climbed to their highest since 2013
Gold’s gains last week came after a Fed meeting in which the central bank held rates steady but spoke of “uncertainties” over the U.S. economic outlook. The European Central Bank and Bank of England also made dovish comments during the week. Precious metals like gold tend to attract buyers in a low interest-rate climate.
But geopolitical tensions between the U.S. and Iran and uncertainties on the global trade front have also lured investors into gold, seen as a haven investment in times of political and economic uncertainty.
Global equities rose cautiously Monday after China’s state-run Xinhua News Agency said Sunday that China’s President Xi Jinping will attend the G-20 summit in Japan this week, giving the first official confirmation of his attendance at the meeting, where he has been expected to talk on the sidelines with U.S. President Donald Trump.
Over the weekend Trump said he would impose new sanctions on Iran starting Monday, days after calling a halt to airstrikes on the country which shot down a U.S. military drone. But he also suggested the two countries will eventually have a positive relationship, toning down harsher rhetoric he has employed for much of his presidency.
“Gold’s stay above the psychological $1400 mark highlights the cautionary tone across various asset classes on Monday. Rising geopolitical tensions as well as the uncertainty over the U.S.-China standoff ensure that safe haven assets remain in a supportive environment for the time being,” said Han Tan, market analyst at FXTM, in a note to clients.
UBS strategists Joni Teves and Roque Montero on Monday lifted their three-month gold target to $1,430 from $1,380 an ounce. “A few years and several false starts later, we think the macro backdrop has now started moving more convincingly in gold’s favor,” the analysts said, though they added that the route for gold is “unlikely to be a straight path higher.”
They still maintain gold will end the year under that $1,400 level, lifting their end-year target to $1,370 from $1,325 an ounce. Their end-2020 forecast was lifted to $1,450 from $1,350, and from 2021 to 2023, the strategists expect gold to end those years at $1,500.
Elsewhere, July silver SIN19, +0.26% rose 7 cents, or 0.5%, to $15.36 an ounce, gaining 3.3% last week.
In other metals dealings, July copper HGN19, -0.04% was down 0.5% at $2.692 a pound. July platinum PLN19, +0.30% added 0.52% to $814.70 an ounce, while September palladium PAU19, +0.49% rose 0.4% to $1,506.20 an ounce.