By Amrith Ramkumar 

Gold prices hovered near their highest level since April 2013 Tuesday, preserving a monthslong rally that has seen investors flock to the safe-haven metal with uncertainty about geopolitics and now the coronavirus swinging markets.

Front-month gold futures for January delivery inched down 0.5% to $1,569.20 a troy ounce on the Comex division of the New York Mercantile Exchange Tuesday, a day after they closed at a nearly seven-year peak. Prices are up more than 20% since the end of May, with lower bond yields around the world and haven buying extending the climb.

Falling yields make gold more attractive for investors seeking more stable assets by making it less likely that they will miss out on outsize gains by owning the metal instead of bonds. The yield on the benchmark 10-year U.S. Treasury note fell to 1.605% Monday, its lowest level since Oct. 9. Yields fall as bond prices rise. The 10-year yield rebounded near 1.65% on Tuesday.

Investors were looking ahead to the Federal Reserve's first statement of 2020, due Wednesday, after three interest-rate cuts last year helped boost gold and the stock market. Figures on fourth-quarter economic growth in the U.S. due Thursday could also swing gold, which has gotten its latest boost with the deadly coronavirus spreading in China.

Concerns about the pneumonia-causing virus slowing travel and economic activity in China have battered industrial commodities like copper and oil in recent days and sent stocks sharply lower on Monday.

Commodities tied to transportation and manufacturing stabilized somewhat on Tuesday. U.S. crude closed up 0.6% at $53.48 a barrel, while Brent crude, the global gauge of oil prices, added 0.3% to $59.51 a barrel. The moves came with analysts weighing comments from officials of the Organization of the Petroleum Exporting Countries that the cartel and allies including Russia are weighing deeper output cuts to help stabilize plunging prices.

Brent is down nearly 10% since Jan. 20, mirroring declines in copper, an industrial metal vital to construction and Chinese economic growth. Front-month copper futures fell 0.65% to $2.5795, dropping for the ninth consecutive session.

Oil traders were looking ahead to weekly figures on U.S. stockpiles, scheduled to be released on Wednesday, with many analysts expecting excess supply in 2020. Oversupply worries have made crude extremely sensitive to demand concerns such as those caused by the coronavirus by fueling bets on surpluses.

"This kind of came out of the blue," said Rebecca Babin, senior energy trader at CIBC Private Wealth Management. "The commodity is going to continue to whip around on every headline" as traders weigh more information about the virus, she added.

Another factor having an impact on commodities is a rebounding dollar. The WSJ Dollar Index, which tracks the U.S. currency against a basket of 16 others, rose for the fourth consecutive session Tuesday, making materials denominated in dollars more expensive for overseas buyers. The dollar has rallied with traders preferring assets tied to the more stable U.S. economy.

Write to Amrith Ramkumar at amrith.ramkumar@wsj.com

(END) Dow Jones Newswires

January 28, 2020 15:22 ET (20:22 GMT)

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