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Gold lifted by haven demand; palladium logs 16-year high

Gold prices scored back-to-back gains Thursday, as weakness in the U.S. equities boosted haven demand for the precious metal and minutes from the Federal Reserve’s meeting last month pointed to concerns over sluggish inflation.

A rally in palladium, meanwhile, lifted futures prices to their highest levels since February 2001. The metal has scored a year-to-date gain of more than 35% amid worries about potential supply shortages and expectations for record demand.

On Comex, gold for December delivery GCZ7, +0.72%  rose $9.50, or 0.7%, to settle at $1,292.40 an ounce after touching a high of $1,296.

If gold breaks through $1,300 an ounce, he expects “a move to test decade highs made in 2011 at $1,900.” said Jeb Handwerger, editor of GoldStockTrades.com, which focuses on mining exploration companies. He also said that doubts about President Donald Trump’s legislative agenda has been bullish for gold prices, referring to the president as “a golden swan to precious metal and commodity investors who love uncertainty and volatility.”

Colin Cieszynski, chief market strategist at CMC Markets, said an apparent attack in Barcelona Thursday “may have had a small impact on gold, but not much overall.”

“While attacks like this are tragic and have significant political and cultural ramifications, their impact on the economy tends to be short-lived,” he said.

Gold prices scored back-to-back gains Thursday, as weakness in the U.S. equities boosted haven demand for the precious metal and minutes from the Federal Reserve’s meeting last month pointed to concerns over sluggish inflation.

A rally in palladium, meanwhile, lifted futures prices to their highest levels since February 2001. The metal has scored a year-to-date gain of more than 35% amid worries about potential supply shortages and expectations for record demand.

On Comex, gold for December delivery GCZ7, +1.00%  rose $9.50, or 0.7%, to settle at $1,292.40 an ounce after touching a high of $1,296.

If gold breaks through $1,300 an ounce, he expects “a move to test decade highs made in 2011 at $1,900.” said Jeb Handwerger, editor of GoldStockTrades.com, which focuses on mining exploration companies. He also said that doubts about President Donald Trump’s legislative agenda has been bullish for gold prices, referring to the president as “a golden swan to precious metal and commodity investors who love uncertainty and volatility.”

Colin Cieszynski, chief market strategist at CMC Markets, said an apparent attack in Barcelona Thursday “may have had a small impact on gold, but not much overall.”

“While attacks like this are tragic and have significant political and cultural ramifications, their impact on the economy tends to be short-lived,” he said.

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Gold prices built on a 0.3% advance from Wednesday.

Analysts at Commerzbank said the metal was sent higher in late trade on Wednesday as the dollar suffered after Trump said he had dissolved two advisory councils following mounting pressure from high-profile CEOs. Trump has faced heavy criticism after he repeatedly blamed “both sides” for violence last weekend at a white supremacist rally in Charlottesville, Va.

“This quashes the initially big hopes that Trump could pursue a business-friendly policy. Ultimately, this could even prove damaging to the U.S. economy,” Commerzbank analysts said.

A weaker dollar tends to send metals, such as gold higher, because the commodity becomes cheaper for other currency holders to purchase. The greenback, however, strengthened a bit Thursday, with the ICE U.S. Dollar Index DXY, -0.32%  up less than 0.1%.

Gold also benefited from dovish minutes from the Fed’s July meeting.

“As expected, the minutes of the latest meeting of the U.S. Federal Reserve gave no indication as to how the Fed might proceed in future. What they did show was the lack of consensus within the Fed, however. The biggest bone of contention is the inflation expectation in the U.S.,” wrote the Commerzbank analysts.

Gold prices usually fall when interest rates go up, because the metal becomes less attractive compared with assets that offer yields.

Meanwhile, palladium futures extended their gains into a second-straight session Thursday, with the latest boost poised to take prices to a more than 16-year high.

Russian nickel and palladium producer Norilsk Nickel said earlier this week that it expects consumption of palladium to each an all-time high of 10.8 million ounces this year.

September palladium PAU7, +0.04%  rose $15.95, or 1.8%, to $926.15 an ounce, which was the highest settlement since February 2001, FactSet data show.

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MARKET SUMMARY

INDICES

Name Last Change
DOW 23358.20 0.43%
S&P 500 2578.85 0.26%
NASDAQ 6782.79 0.15%
TSX 15998.57 0.40%
TSX-V 799.35 0.00%

Resource Commodities

Name Last Change
Gold 1294.20 1.20%
Silver 17.31 1.33%
Copper 3.06 0.62%
Platinum 952.00 1.56%
Oil 56.55 2.49%
Natural Gas 3.10 1.42%
Uranium 24.25 N/A
Zinc 1.45 0.00%

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