Gold futures on Monday tallied a fourth straight session climb, settling at their highest in more than three months, as investors fled to the perceived safety of havens like precious metals and bonds amid persistent tariff tensions between the U.S. and its global trade partners.
"Gold is looking good here-responding to the rise in economic wars via tariffs to the global economic slowdown," said Peter Spina, president and chief executive officer of GoldSeek.com. "Bonds are surging and gold should too."
"There are good reasons to believe the breakout in gold is developing as we speak and by the end of this year we will see it explode towards $1,400-$1,500," he told MarketWatch.
Gold for August delivery on Comex GCM19, +0.25% gained $16.80, or 1.3%, to settle at $1,327.90 an ounce, after rising 1.5% on Friday. The settlement was the highest since Feb. 26, when the most-active contract finished at $1,328.50, according to FactSet data.
Last week, the most-active contract rose 2.1% for the week, and up 2% for the month, after three-consecutive monthly losses.
July silver SIN19, +0.28% meanwhile, rose 17.3 cents, or 1.2%, to $14.74 an ounce, after rising 0.5% Friday. The precious metal on Friday saw a weekly rise of nearly 0.1%, but settled down 2.9% for May.
With the Treasury bond market "on fire it is clear that fears of recession are burning brightly in the headlines and consequently gold is a direct benefactor," analysts at Zaner Metals wrote in a daily newsletter.
Havens like gold and bonds rallied in May in what proved a bruising month for assets perceived as risky, as trade clashes between the U.S. and international trade partners undermined optimism on Wall Street and drive investors into precious metals andy government paper. Indeed the 10-year Treasury note yield TMUBMUSD10Y, -0.69% was at 2.09% as gold futures settled, extending its decline to the lowest level since September 2017 and deepening an so-called yield-curve inversion between the 3-month Treasury yield TMUBMUSD03M, -0.12% and the longer-dated benchmark bond. An inversion is viewed as an accurate predictor of a recession.
Read: Panic-stricken traders now expect Fed to cut rates twice n 2019, this chart shows
Meanwhile, the Dow Jones Industrial Average DJIA, +2.06% and the S&P 500 index SPX, +2.14%were trading lower Monday just as gold futures settled. Stocks had seen rough trading in May with all of the main benchmarks down sharply on heighten tariff tensions.
Gains in precious metals came as the dollar, which most commodities are priced in, declined against its currency rivals. A weaker dollar can make bullion more attractive to buyers using weaker currencies. The ICE U.S. Dollar Index DXY, +0.03% was down 0.5% at 97.223 in North American trade Monday.
"Although there may be some mean reversion in [currencies], I think the fear factor is there and precious metals are likely to continue to appreciate," wrote Marshall Gittler, chief strategist of ACLS Global, in a Monday research note.
On Friday, markets were rattled anew after President Donald Trump announced in a tweet that the U.S. would impose a 5% tariff on all goods from Mexico until that country stops the flow of illegal immigrants into the country.
Global trade tensions have fed concerns over an economic slowdown. On Monday, American manufacturers said business grew in May at the slowest pace in 2 1/2 years, with the Institute for Supply Management's manufacturing index slipping to 52.1% last month from 52.8% in April.
Back on Comex, most industrial metals looked to recoup some of the losses they suffered last month. July copper HGN19, +0.11% settled at $2.65 a pound, up 0.4%, while July platinum added 3.4% to $820.90 an ounce. September palladium PAU19, -0.35% however, shed 1.2% to $1,315 an ounce.
Among the exchange-traded funds, SPDR Gold Shares GLD, +0.03% and the iShares Silver Trust SLV, +0.14% each traded 1.4% higher, while the VanEck Vectors Gold Miners ETF GDX, +0.44% rose 3.7%.