As a weaker US currency helped cap a year marked by global economic jitters and trade frictions, gold climbed to a three-month high to secure its strongest annual performance since 10 years ago.
While central banks globally have adopted a looser monetary policy to boost financial growth, the bullion has gained 20 percent in the past days.
Brexit, instability in regions ranging from Chile to Hong Kong, and purchasing spreads from main central banks and exchange-traded funds have added to market support.
On Tuesday, the strongest since Sept. 25, spot gold rose as much as 0.7 percent to $1,525.38 an ounce. It traded at 1:40 p.m. for $1,520.13. New York City. Gold futures for delivery in February fell 0.4 percent to settle on the Comex at $1,523.10.
Even after US President Donald Trump said he would sign the first phase of a long-awaited trade deal with China on January 15, the metal managed to hold on to gains, alleviating uncertainty that has fuelled demand for the bullion.
According to Tai Wong, head of metal derivatives trading at BMO Capital Markets, "the trend is not really a surprise," after yesterday's headlines that China's Vice-Premier Liu He's visit to Washington to sign the so-called phase-one trade deal.
Nonetheless, some experts are not so sure about the momentum that the yellow metal can sustain, and JPMorgan Asset Management warned that bullion may not offer sound portfolio security either.
In an interview with Bloomberg TV, Hannah Anderson, a global market strategist at JPMorgan, said: "There are very few environments where gold does well, and it's not necessarily the case that 2020 will not be any of them."
JPMorgan came out this month to argue on a risk-on investment allocation for 2020, as the global economy is gaining momentum in the wake of the recent slowdown.
Data on Tuesday showed that the manufacturing sector in China continued to expand production in December, providing proof that the second-largest economy in the world is stabilizing.
Statements from China and the United States show that both countries are committed to their phase-one trade pact. Other emerging global tensions, however, could fuel the market for haven assets in 2020, DailyFX strategist David Song said in a note.
Meanwhile, silver has risen 15 percent this year in other precious metals trading, poised for its best performance since 2010. Platinum, on the other hand, is up 22 percent, the largest annual increase since 2009, while top-performing palladium gained 54 percent to open up the new year.
