Investing.com - Gold continued its effort to move past the $1,300 tape as dismal data on global factory activity pushed investors back from risk as markets began trading for 2019.
Futures of the yellow metal hit near 7-month highs above $1,290 per troy ounce on Wednesday after China’s Purchasing Manager Index (PMI) contracted for the first time in 19 months in December. The PMI number of 49.7 indicated weaker-than-expected factory activity in the world's second-largest economy, which many economists believe will be headed for a slowdown this year.
In the United States, Markit’s U.S. PMI reading for December was revised down to 53.8, the lowest reading since September 2017. In Europe, eurozone manufacturing activity barely expanded at the end of 2018 in a broad-based slowdown.
COMEX futures settled up $2.40, or 0.2%, at $1,284.10 after reaching a June 10 peak of $1,290.80.
Despite rallying in the fourth quarter of last year, COMEX gold still ended 2018 down about 2%, weighed by sharp declines earlier in the year as the Federal Reserve raised rates without pause each quarter.
"To start last year in 2018, the price of gold was trading at $1303," said Walter Pehowich, executive vice president at Dillon Gage Metals in Addison, Texas. "So right now, to start the year, we are not too far from surpassing that number."
But with the dollar looking unsettled on Wednesday, reaching a near 2-week high despite expectations it will decline if the Fed withholds further rate hikes, gold could face resistance on the way up, Pehowich said.
"I still believe gold will trade in a two-step forward one-step back process as the world's geopolitical issues come center stage."
In other precious metals on COMEX, silver futures rose 0.1% to $15.56 per troy ounce. For the year, it fell 9%.
Palladium declined 0.1% to $1,196.
Sister metal platinum slipped 0.5% to $797.
In base metals, COMEX copper fell 1.1% to settle at $2.603 per pound.