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Metals Stocks: Gold ends lower after tapping a one-month intraday high; silver retreats

Gold futures on Wednesday briefly touched their highest intraday level in a month, before ending lower for the trading session, pulled down in part due to strength in the U.S. dollar ahead of Thursday’s monthly consumer price index reading.

Silver prices also declined a day after settling at a nearly five-month high.

Price action

Gold futures for December delivery

fell $2.30, or 0.1%, to settle at $1,713.70 per ounce on Comex after trading as high as $1,725.80. The contract gained 2.1% on Tuesday to settle above $1,700 for the first time in roughly a month.

Silver for December delivery

settled at $21.327 an ounce, down by 17 cents, or 0.8%. The contract climbed 2.8% a day earlier to finish at its highest since June 21.

December palladium

fell $73.40, or 3.8%, to $1,859.20 per ounce, while January platinum

lost $17.20, or 1.7%, to $997.30 per ounce. Both palladium and platinum posted their first losses in four sessions.

December copper

added 2 cents, or 0.5%, to $3.70 per pound.

What’s happening

After gold traded back above the psychological $1,700 point on Tuesday, bulls appeared to in a “position of power,” Lukman Otunuga, manager, market analysis at FXTM, told MarketWatch.

However, “the precious metal’s near-term outlook will most likely remain influenced by fundamental drivers,” he said. Republicans and Democrats remain in a tight race for control, he said, and “any shift in the balance of power in the Senate could impact the dollar, which may find its way back to gold.”

In Wednesday dealings, the ICE U.S. Dollar Index
a gauge of the greenback’s strength against a basket of major currencies, was up 0.8% at 110.507 after touching its lowest level since September a day ago.

Strength in the dollar can put pressure on dollar-denominated commodities such as gold and silver. A weaker U.S. dollar and lower Treasury yields helped push gold and silver higher on Tuesday.

While the latest move higher in gold is encouraging for bulls, the yellow metal must surmount its highs from early October to break out of the downtrend that has kept pressure on prices since March, analysts at Sevens Report Research said.

“Technically speaking, gold still has some work to do on the charts starting with a break above the early October high of $1,735 before we can more comfortably suggest the trend is shifting while it is also too early to call a top in yields or the dollar,” they said.

Investors await the latest U.S. inflation reading due out Thursday.

“Gold may be exposed to renewed selling pressure if the data exceeds market expectations — especially if speculation rises over the Fed firing another monetary policy bazooka down the road,” said Otunuga.

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