Gold price pressured by stock-market bounce, dollar strength
New York (Oct 31) stronger dollar and a bounce for beaten-down equities kept modest pressure on gold futures Thursday, robbing the precious metal of haven-related demand.
Gold for December delivery GCZ8, -0.43% on Comex fell $6.40, or 0.5%, to $1,218.90 an ounce. December silver SIZ8, -0.88% fell 12.2 cents, or 0.8%, to $14.34 an ounce.
“A firmer U.S. dollar and a noticeable recovery on the global stock markets are weighing on [the gold] price,” wrote analysts at Commerzbank, in a Thursday 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.
Gold is on track for a 1.9% monthly rise, based on the most active contract, trimming its year-to-date decline to 6.9%.
Stock-index futures pointed to a higher start for Wall Street after a strong Tuesday bounce that pushed the S&P 500 SPX, +1.57% and Dow Jones Industrial Average DJIA, +1.77% back into positive territory for 2018. Still, stocks have suffered a brutal and volatile October that’s left the S&P 500 down more than 7% for the month.
The dollar was mixed versus major rivals, leaving the ICE U.S. dollar index DXY, -0.05% little changed but up 0.7% so far this week. A stronger dollar can be a negative for commodities, making them more expensive to users of other currencies.
The SPDR Gold Shares ETF GLD, -0.44% was off 0.5% in premarket but on track for a 2.7% monthly rise. The iShares Silver Trust ETF SLV, +0.15% was off 1% premarket and held a 2.5% month-to-date decline through Wednesday.
In other metals trade, December palladium PAZ8, +0.14% rose 0.1% to 1,056.50 an ounce, while January platinum PLF9, -0.01% was off 0.1% to $838.10 an ounce.
MarketWatch
