Gold prices rose 1 percent to a near 3-week high on Tuesday as early gains in stocks and other assets perceived as risky gave up gains and investors fled to save-haven bullion. Platinum and palladium both jumped by more than 4 percent as investors scrambled for position as the new year got under way.
The themes of late 2016 appeared to be persisting in the wider markets, with equities rising while the dollar index touched a 14-year high boosted by strong economic data. As the session progressed, the dollar and equities pared gains, supporting gold prices.
Spot gold was up 0.6 percent at $1,159.06 an ounce by 2:17 pm EST (1917 GMT), while US gold futures for February delivery ended the session up 0.9 percent at $1,162. The metal fell sharply in the wake of Donald Trump's victory in November's US presidential election, sliding by more than 12 percent in the fourth quarter. Trump's victory boosted the dollar and sparked a sharp rally in bond yields, lifting the opportunity cost of holding non-yielding gold and blunting investors' appetite for the metal.
However, Trump could also boost investor interest in the precious metal, some market participants said. "We are not going to dismiss the precious metal completely considering we still have the Trump card in the pack," said Mihir Kapadia, CEO and Founder of Sun Global Investments.
Spot platinum was up 4 percent at $935.24` per ounce after rising by more than 5 percent. Meanwhile, sister metal palladium was up 4.5 percent to $709 after rising by about 5 percent. Palladium was the best-performing precious metal last year, with the price rising 20 percent for its biggest annual gain in six years. Platinum lagged gains in the wider complex, however, ending 2016 only 1 percent higher. Spot silver was up 2.23 percent at $16.29 per ounce.
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