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Gold Price Headed for Best Quarter in a Year

Gold prices were on track for an 8 percent quarterly rise on Friday (March 31), the biggest gain since the first quarter of 2016 when prices rose around 16 percent, according to ICE Benchmark Administration Limited.

“In the short term, factors including a strengthening dollar could pull prices down to around the $1,230 an ounce range,” said Yuichi Ikemizu, head of commodity trading at Standard Bank in Tokyo.

But uncertainty over US President Trump’s tax and investment plans and elections in Europe have supported the surge in prices, as investors turn to the precious metal as a safe haven asset.

“The fear trade has driven the market so far this year,” said David Govett at Marex Spectron.

Similarly, analysts at GFMS Thomson Reuters said that buying of gold as a haven from risk, plus a recovery in Indian buying, are likely to push prices to an average $1,259, up from $1,248 an ounce last year.

Prices will be supported even in the face of a persistent oversupply, “[a]s the year progresses … safe haven flows become increasingly likely, assisted by either U.S. or European politics or a combination thereof,” GFMS said.

As of 1.00 pm EST on Friday, the gold price was trading at $1,249.90 per ounce.

Looking over to silver, prices were set for a weekly gain of more than 2 percent. But silver headed lower on Friday, paring gains for the week, as stability returned to the US dollar. Analysts expect the precious metal prices to rebound in the coming days, supported by the dovish US fed interest rate outlook.

As of 1.00 pm EST on Friday, the white metal was trading at $18.23 per ounce.

Platinum rose 0.3 percent to $945.80 per ounce, after hitting its lowest in just over two weeks at $941 earlier in the session. The metal was also set to end the month about 7.6 percent lower, which would mark its worst monthly performance since August 2016. Palladium eased 0.2 percent to $792.43 an ounce and has risen over 16 percent this quarter.

On the base metals side, London copper slipped on Friday but was set to finish higher lifted by a curve in mine supply, while a ramp-up in China’s factory activity and fresh investor buys are expected to drive prices higher in the April quarter. London Metal Exchange copper was trading at around $5893 a tonne on Friday, and on track for a 6.5-percent gain for the first quarter.

Lastly, spot oil prices were on track to log a loss of around 7 percent for the first quarter, set to become the worst-performing asset of Q1, as traders questioned the sustainability of the OPEC-led production cut agreement and prospects for US output increase.

May WTI crude fell 20 cents, or 0.4 percent, to $50.15 a barrel on the New York Mercantile Exchange. May Brent oil on London’s ICE Futures exchange shed 27 cents, or 0.5 percent, to $52.69 a barrel, ahead of the contract’s expiration at the session’s end.

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