December 31, 2018 / 7:22 PM / 6 months ago

Gold loses cachet to U.S. dollar in 2018, palladium sparkles with third year of gains

FILE PHOTO: A saleswoman displays a gold necklace to a customer inside a jewellery showroom on the occasion of Akshaya Tritiya, a major gold buying festival, in Mumbai, India April 18, 2018. REUTERS/Francis Mascarenhas/File Photo

(Reuters) - Gold prices were on course for their first annual fall in three years on Monday, having largely been outgunned by the U.S. dollar as a refuge from global geopolitical and trade tensions, while palladium notched up a third year of gains propelled by robust investor demand coupled with a sustained deficit.

Spot gold XAU= traded at $1,279.41 per ounce late on Monday, on track to end 2018 down nearly 1.8 percent, while the most-active gold futures contract GCcv1 settled 2018 down 4.2 percent at $1,281.30 an ounce.

In contrast, spot palladium XPD= is set to gain nearly 19 percent this year, as a global deficit pushed prices of the autocatalyst metal above those of bullion in brief spurts for the first time in 16 years, out-performing other major precious metals.

U.S. palladium futures PAcv1 ended 2018 up 18.3 percent at $1,197.20 an ounce, its third straight year of gains.

Meanwhile, sister metal platinum, was expected to finish the year down 14 percent XPT=.

Platinum, more heavily used in the diesel vehicles that have fallen out of favour since the Volkswagen emissions-rigging scandal broke in 2015, fell below palladium for the fist time last year.

Tracking gold’s trajectory was spot silver XAG=, set to fall 9 percent in 2018.

COMEX silver futures SIcv1 were down 12 percent at $15.54 an ounce in 2018, the biggest yearly decline since 2014.

Reporting by Swati Verma in Bengaluru; Editing by Alistair Bell

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