(Reuters) - Gold prices gained on Monday as global economic growth concerns kept prices propped above $1,500 an ounce and expectations of a U.S.-China trade deal reduced safe-haven buying of the weakening dollar.
Spot gold rose 0.3% to $1,515.42 per ounce as of 10:25 a.m. ET (1526 GMT). Prices added 2.2% in the previous week, marking their best week since early August.
U.S. gold futures were unchanged at $1,518.40 per ounce.
“The major driver behind gold’s appreciation is the dollar weakness,” said FXTM analyst Lukman Otunuga, adding that bullion could extend gains into 2020 if trade developments between the two nations turned south.
“We haven’t heard the details (of the deal) yet and at the same time it has not been signed on paper.”
Thin end-of-year volumes exacerbated the broad weakness in the dollar .DXY, which dipped for three straight sessions, and on Friday suffered its biggest one-day fall since March.
Although the finer details of the agreement have not yet been disclosed, the South China Morning Post reported on Monday that Chinese Vice Premier Liu He will visit Washington this week to sign the pact.
Gold has gained about 18% in 2019 alone on the back of global recessionary fears triggered by the long-drawn out trade spat between the world’s two largest economies, and quantitative easing by major central banks.
“As long as gold is able to keep above this psychological level of $1,500, we will see gold challenging $1,535 and $1,550 during the first quarter of 2020,” FXTM’s Otunuga said.
Indicative of investor sentiment, holdings of the world’s largest gold-backed exchange-traded fund, SPDR Gold Trust, rose 0.1% to 893.25 tonnes on Friday, their highest since Nov. 29.
“Gold has punched through the $1,500 level over the past week and is approaching a two-month high following a technical breakout, supplemented by a weakening dollar...” said INTL FCStone analyst Rhona O’Connell in a note.
Amongst other precious metals, silver added 1% to $17.93 an ounce and platinum jumped 1.4% to $958.13. Palladium was slightly muted at $1,903.41, struggling to hold ground above $1,900.
Reporting by Karthika Suresh Namboothiri in Bengaluru; editing by Nick Macfie