Gold's December rally stays alive to seal best year since 2010

Gold climbed to a three-month high to clinch its best annual performance since 2010, as a weaker dollar helped cap a year marked by global economic jitters and trade frictions.

Bullion has gained 19% this year as central banks globally embraced looser monetary policy to boost growth. Brexit, unrest in regions from Chile to Hong Kong and buying sprees from key central banks and exchange-traded funds have also helped support prices.

Spot gold climbed as much as 0.7% to $1 525.38 an ounce on Tuesday, the highest since September 25, and traded at $1 522.84 by 10:47 in London. The Bloomberg Dollar Spot Index fell to the lowest since June.

Still, some analysts doubt that gold's strength will stick next year and JPMorgan Asset Management cautioned that bullion may not offer sound portfolio protection.

"There are very few certain environments in which gold does well, and it's not necessarily the case that 2020 won't be any of those," Hannah Anderson, a global market strategist at JPMorgan, said in an interview with Bloomberg TV.

"In the next downturn, I do believe that bonds still could be defensive assets."

JPMorgan has come out this month to make the case for a risk-on investment allocation for 2020 as the global economy gathers momentum in the wake of the recent slowdown.

On Tuesday, data showed China's manufacturing sector continued to expand output in December, adding to evidence that the world's second-largest economy is stabilising.

Commentary out of China and the US suggest that both countries are committed to their phase-one trade pact. However, haven asset demand in 2020 could be supported by other brewing global tensions, DailyFX strategist David Song said in a note.

"The threat of a US-EU trade war may become a greater concern," he said.

In other precious metals, silver has risen 17% this year, also poised for its best performance since 2010. Platinum is up 22% and top-performer palladium is set to end 2019 with an annual gain of 52%.

ZAR/USD
16.96
(+0.15)
ZAR/GBP
21.82
(+0.40)
ZAR/EUR
19.86
(+0.09)
ZAR/AUD
12.09
(-0.13)
ZAR/JPY
0.16
(+0.48)
Gold
1884.10
(+0.08)
Silver
23.81
(+0.30)
Platinum
880.00
(+0.06)
Brent Crude
42.88
(+1.08)
Palladium
2263.00
(+0.96)
All Share
54565.64
(-0.28)
Top 40
50360.82
(-0.43)
Financial 15
10040.74
(+1.09)
Industrial 25
73665.60
(-0.44)
Resource 10
53838.23
(-0.97)
All JSE data delayed by at least 15 minutes morningstar logo
Company Snapshot
Voting Booth
Do you think it was a good idea for the government to approach the IMF for a $4.3 billion loan to fight Covid-19?
Please select an option Oops! Something went wrong, please try again later.
Results
Yes. We need the money.
11% - 1382 votes
It depends on how the funds are used.
73% - 8958 votes
No. We should have gotten the loan elsewhere.
16% - 1979 votes
Vote