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Gold prices suffered from sharp losses yesterday, on the back of a stronger dollar and a bounce for beaten-down equities, but month-to-date losses for benchmark US stock indexes have helped pull prices for the precious metal up in October.
Gold for December delivery GCZ8, -0,73 percent on Comex fell $11,20, or 0,9 percent, to $1,214.10 an ounce, poised for its lowest settlement in three weeks. For the month, however, prices trade roughly 1.5 percent higher, based on the most-active contracts, FactSet data show. A gain for the month would follow six monthly declines in a row.
December silver SIZ8, -1,12 percent fell 18,7 cents, or 1,3 percent, to $14,275 an ounce, on track for the lowest finish in about six weeks. It trades down about 2,9 percent for the month.
“A firmer US dollar and a noticeable recovery on the global stock markets are weighing on the gold price,” wrote analysts at Commerzbank in yesterday’s note. “Thus the technical picture has also become somewhat more gloomy again, which could make short-term-oriented investors more reluctant to bet on a rising gold price.”
The weakness saw gold fall below its 100-day moving average just below $1,220 an ounce, they noted. At the same time, memories of the mid-October pop higher by the metal means “it remains to be seen whether speculators will make any renewed attempts to short gold—at the time, many speculative investors were caught wrong-footed when the price suddenly surged,” forcing them to cover short positions and adding to the rally.
US stock indexes moved higher on Wall Street after a strong Tuesday bounce that pushed the S&P 500 SPX, +1,50 percent and Dow Jones Industrial Average DJIA, +1.38 percent back into positive territory for 2018. Still, stocks have suffered a brutal and volatile October that is left the S&P 500 down 6,8 percent for the month.
The dollar edged up versus major rivals, leaving the ICE US dollar index DXY, +0,06 percent up 0,1 percent at 97,129—trading up 0.8 percent so far this week and poised for a monthly rise of 2.1 percent.
A stronger dollar can be a negative for commodities, making them more expensive to users of other currencies.
The SPDR Gold Shares ETF GLD, -0.69 percent was off 1 percent but on track for a 1.7 percent monthly rise. — marketwatch.com.
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