Gold pulls back from one-week highs as dollar index tips higher
New York (Nov 29) Gold churned below the one-week highs scored in the previous session as a leading dollar index squeezed out a narrow gain.
February gold GCG8, -0.10% fell 80 cents, or 0.1%, to $1,298.40 an ounce. The settlement above $1,299.20 Tuesday was the highest for the contract since Nov. 17 and the metal did briefly pierce $1,300 earlier in that session. The exchange-traded SPDR Gold Trust GLD, +0.06% traded slightly higher premarket despite weakness for the futures.
Gold was little changed in electronic trading after Tuesday’s close as news reports said North Korea launched another missile.
Gold hit a one-week high Tuesday after a confirmation hearing for Jerome Powell to become Fed chairman contained few signs that he will bring any major new thinking or change of approach to the central bank’s interest-rate panel, which is expected to continue to slowly raise interest rates.
Higher interest rates tend to boost the dollar and push bond yields up, putting pressure on gold prices by increasing the opportunity cost of holding nonyielding bullion. But financial markets have largely priced in a December rate hike. They’re less certain about whether the Fed will be able to deliver on a projected three rate hikes for next year.
The ICE U.S. Dollar Index DXY, +0.08% was up less than 0.1% at 93.24. The gauge remains up about 0.2% for the week, though it’s still down 9% for the year. Gold and the dollar typically trade inversely as moves in the U.S. unit can influence the attractiveness of commodities to holders of other currencies.
Traders will be tracking progress on a U.S. tax overhaul after the Senate Budget Committee on Tuesday voted 12-11 to advance a Republican tax bill. A full Senate vote could be possible as early as Thursday.
A second estimate on U.S. third-quarter gross domestic product is due at 8:30 a.m. Eastern Time, with economists polled by MarketWatch forecasting 3.3% growth.
An October reading on pending home sales is slated to arrive at 10 a.m. Eastern. That’s followed at 2 p.m. Eastern by the Federal Reserve’s Beige Book, a report that provides anecdotal evidence about U.S. economic conditions.
Departing Fed Chairwoman Janet Yellen is scheduled to testify on the economic outlook before a congressional committee at 10 a.m. Eastern.
Also on the Fed front, New York Fed President William Dudley is due to discuss the economy’s prospects at New Jersey’s Rutgers University at 8:30 a.m. Eastern. Later, San Francisco Fed President John Williams is slated to speak at 1:50 p.m. Eastern at an annual economic forecast luncheon in Phoenix sponsored by Arizona State University.
Elsewhere on Comex, March silver SIH8, -0.11% which is the most-active contract, fell by less than 1 cent, or 0.02%, to $16.910 an ounce. The exchange-traded iShares Silver Trust SLV, -1.18% was little changed.
MarketWatch
