Gold edges lower as stocks stabilize
New York (Jan 27) Fresh off a week to savor for gold bugs, the precious metal posted a minor retreat Monday as U.S. stocks appeared set to stabilize after a rout inspired in part by turmoil in emerging markets.
Gold for February delivery fell $3.10, or 0.2%, to $1,261.20 an ounce. Gold had initially gained ground, pushing above the high from last week, prices saw a 1% rally and ended at their highest level since Nov. 19. Over the past five weeks, gold has managed to tack on 5%.
March silver hung onto gains, rising 3 cents, or 0.2%, to $19.80 an ounce.
Gold slipped as U.S. stock-index futures pointed to a higher start for Wall Street. Turmoil in emerging markets contributed to a selloff in stocks last week, but the previously hard-hit Turkish lira bounced back Monday after the country’s central bank said it would hold an extraordinary policy meeting on Tuesday.
“We still do not expect sustained upside from here, with the market pausing ahead of the [Federal Reserve policy] meeting next week and also as physical flows are easing while some investors will choose to take profits,” said Andrey Kryuchenkov, London-based strategist at VTB Capital, in a note.
On Wednesday, attention will turn to the Federal Reserve when it wraps up its two-day meeting, with an additional $10 billion taper of asset purchases widely expected. In December, the Fed said it would trim $10 billion from its $85 billion-a-month in asset purchases.
Russell Brown of Scotiabank said that recent action in gold offers “encouraging early signs that the lows of $1,180 in June 2013 and $1,182 earlier this month are a double bottom.”
He also said prices are nearing an important technical mark. “The $1,300 level is very significant in gold, as it is also the 50% retracement of the long-term uptrend,” he said.
Elsewhere in metals trading, March palladium fell $4.60, or 0.6%, to $730.20 an ounce while platinum for April delivery lost $3.40 an ounce, or 0.2%, to $1,425.20. March high-grade copper fell less than a penny to $3.27 a pound.
