Gold prices edged up on Tuesday, December 26, to more than a three-week high on a weaker dollar, while palladium hit its highest since Feb. 2001.
Spot gold was trading 0.3 percent higher at $1,278.04 per ounce at 0715 GMT, after hitting its highest level since Dec. 1 at $1,279.19. U.S. gold futures rose 0.3 percent to $1,282.50 an ounce.
Anemic U.S. consumption data on Friday helped gold, while the dollar remained under pressure in thin trading in Asia, said Jeffrey Halley, senior market analyst at OANDA.
“With North Korea’s Constitution Day Holiday on Wednesday, there may also be an element of risk hedging in play for regional markets at the moment,” Halley said.
Tension has been rising over North Korea’s nuclear and missile programmes, which it pursues in defiance of years of U.N. Security Council resolutions, with bellicose rhetoric coming from both Pyongyang and the White House.
U.S. growth prospects dimmed on Friday as data showed spending outpaced income in November and the Federal Reserve’s preferred inflation measure – the personal consumption expenditures price index that excludes food and energy – rose by just 0.1 percent in November.
Last week, gold posted its second consecutive weekly gain and closed above its 200-day moving average, a key technical indicator.
Adding a touch of bullishness to gold was the data from U.S. Commodity Futures Trading Commission (CFTC) on Friday, which showed that hedge funds and money managers had increased their net long stance in gold in the week to Dec. 19.
Spot palladium on Tuesday rose 0.8 percent to $1,044.50 an ounce, a 17-year high. Prices touched their highest level since February 2001 at $1,046.70 as strong demand from autocatalyst makers reinforced the prospect of market shortages.
Analysts expect that about 80 percent of global palladium demand will come from autocatalysts for gasoline-powered cars, which many now prefer over diesel-fuelled vehicles.
Spot silver hit more than three-week highs on Tuesday. It was up 0.5 percent to $16.45 per ounce. Spot platinum rose 0.3 percent to $916.55 an ounce.
