Investing.com -- Gold prices rose to their highest in more than three months in the first full session of 2020 on Thursday, ironically supported by a broad risk-on move in markets that saw global stocks rise.
Money has flowed out of the safe-haven dollar over the holiday season, leaving it almost 1% lower against a basket of developed market economies. In as much as gold trades more like a currency than a commodity, gold has followed an upward path against the dollar first beaten by commodity currencies such as the Aussie and loonie.
By 11:30 AM ET (1630 GMT), gold futures for delivery on the Comex exchange were up 0.5% at $1,530.55 a troy ounce, having earlier hit an intraday high of $1,533.95.
Spot gold was up 0.7% at $1,528.10 an ounce.
The precious metal has risen some 2% against the dollar since the Christmas break.
Gold has also risen in parallel with U.S. Treasury bonds, with which it competes for the attention of safety-seeking investors, in that time. While bullion has risen 2%, the 10-year note has been bid up, pushing the yield down to 1.86%.
In Europe too, bond yields fell throughout the day after briefly touching their highest in several months. The German 10-year Bund reversed from a high of -0.16% to -0.23%, despite the fact that equities held most of their gains throughout the session.
Global monetary policy easing, the fundamental factor that most supported prices last year, made its first appearance of the year overnight as China’s central bank cut its reserve requirement ratio for banks, freeing up $115 billion in liquidity.
However, a factor more likely to affect gold prices directly was how the Federal Reserve will unwind the enormous liquidity injection that it made before year-end to ensure that there was no spike in repo rates as at the end of 2018. In all, the Fed injected $255 billion into the money market over the year-end period. The indications were that it had succeeded in quelling volatility, with only $25.6 billion in funds demanded at the final auction of the year.
Elsewhere, silver futures rose as high as $18.12 an ounce before retreating to $18.03, up 0.7% on the day. Platinum futures were up 1.2% at $989.20 an ounce.
Markets are only expected to get back into full swing on Monday.