New Delhi: Gold prices rose above the key $1,500 per ounce level on Thursday to hit their highest in more than two months, as uncertainty around the signing of a trade deal between the United States and China boosted safe-haven flows into the metal.
Spot gold rose 0.3% to $1,503.16 per ounce by 0709 GMT. Prices hit their highest since Nov. 5 earlier in the session at $1,505.32. US gold futures were up 0.2% to $1,508.00 per ounce.
"The data was weak before Christmas from the U.S. and we haven`t seen anything signed or concrete yet in terms of the phase one trade deal ... so the market is unsure whether that will come true," said Brian Lan, managing director at dealer GoldSilver Central in Singapore.
China`s Commerce Ministry said on Thursday that Beijing and Washington were still in the process of completing necessary procedures while maintaining close communication to sign the deal.
US President Donald Trump said on Tuesday there would be a signing ceremony with the Chinese President Xi Jinping for the first phase of the agreement.
Lingering concerns over growth remained as data on Monday showed that new orders for key U.S.-made capital goods hardly rose in November and shipments fell, suggesting business investment will probably remain a drag on the economy in the fourth quarter.
Economic data from the United States is keenly watched for cues on the central bank`s future monetary trajectory. Gold is sensitive to rising interest rates, which lift its opportunity cost.
The metal has gained about 17% so far this year and is on track for its best year since 2010, due mainly to the protracted tariff dispute and its impact on the global economy.
"The catalyst for next year is the U.S.-China trade friction with many unsolved issues, then there`s Brexit by January end and the US election in November - all these uncertainties could lead to a temporary spike in gold prices," said Margaret Yang Yan, a market analyst at CMC Markets.
"Technically, gold prices have broken out above and trending upwards. It`s flipping from a bearish to a bullish trend." Among other precious metals, silver firmed 1% to $17.95 per ounce, after having hit its highest since Nov. 5 earlier in the session at $18.01.
Platinum advanced 1% to $947.85, after having touched its highest since Nov. 4 earlier in the session at $954.03 per ounce, while palladium rose 0.6% to $1,894.08 per ounce.