Gold extended gains on the first full trading day of 2020 to set new 3-month highs. On top of that, these gains came despite strength in both the dollar and stocks today!

These gains bode well for a short-term challenge of the 1557.06 peak from September and return further credence to the dominant uptrend. The yellow metal posted an 18.3% gain in 2019, with the bulk coming in Q3. Fresh highs for the rally early in the new year would offer further encouragement to the bulls.

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Central bank purchases of gold combined with their generally easier monetary policies were driving forces in 2019 and appear poised to continue into 2020. While tensions surrounding the U.S./China trade war has eased in recent weeks, it seems a final deal may still be months away.

The Phase One trade deal will reportedly be signed at the White House on January 15 with high-level Chinese government officials in attendance. President Trump tweeted on Tuesday that he would travel to Beijing "at a later date" to begin talks on Phase Two.

Similarly, while the UK election provided some clarity with regard to Brexit. There are still plenty of details to work out, any one of which might stoke fresh uncertainty and haven demand for precious metals.

The latest escalation of tensions in the Middle East – centered on Iran and its proxies – is likely to offer further support for gold.

Silver ended 2019 having retraced just over half of the corrective losses off the September high at 19.65. Silver notched a 15% gain in 2019, its best performance since 2010.

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