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Gold knocked back to over 1-week low as record-high stocks lure investors

Gold knocked back to over 1-week low as record-high stocks lure investors

Tue Sep 12 2017


Gold prices fell for a second session Tuesday, settling at their lowest in over a week as a prevailing tide of investors continued to take their chances on further upside in equities, snubbing haven assets.


Gold for December delivery GCZ7, +0.17%  fell $3, or 0.2%, to settle at $1,332.70 an ounce, holding ground at their lowest finish since Sept. 1, according to FactSet. The SPDR Gold Shares ETF GLD, +0.29%  was up less than 0.1%.


The S&P 500 SPX, +0.34% climbed Tuesday, building on its all-time high scored to start the week.


“Although the appetite for equities may further affect gold prices, investors are likely to remain cautious and hedge against many unknowns,” said Hussein Sayed, chief market strategist at FXTM. “That’s why we didn’t see any significant outflows from gold-backed exchange-traded funds.”


He pointed out that the “yellow metal is still up 10% from June’s low, and we expect the $1,300 will prove to be a strong support level.”


Read: Gold bulls are looking for a ‘major breakout’ above $1,400 an ounce


The retreat for gold Tuesday followed its finish Friday at its highest since Sept. 6, 2016, for a most-active contract, according to FactSet. The metal gained 1.6% last week, chiefly driven by concerns that North Korea was preparing to conduct another missile test over the weekend to mark the country’s Foundation Day. The weekend passed without a test. And new sanctions against North Korea agreed by the UN Security Council Monday were not as wide-ranging as the U.S. had originally demanded.


“This is clearly a relief for market participants and is generating higher risk appetite,” said Carsten Fritsch, commodities analyst with Commerzbank, in a note.


“The continuing inflows into gold ETFs are proof that investors still feel some need for security, however,” he said.


The U.S. dollar lost ground against the British pound in particular Tuesday, with sterling hitting its highest level against the greenback this year after a strong U.K. inflation report raised the prospects for the Bank of England lifting interest rates sooner than later.


The greenback, however, rebounded versus the Japanese yen USDJPY, -0.04% offsetting pressure from the pound’s rally, sending the broader ICE U.S. Dollar index DXY, -0.08%  up by less than 0.1%, to 91.91.


On Tuesday, data showed that U.S. job openings moved up slightly to 6.17 million in July, setting another record.


But the market’s Federal Reserve guessing game continues with speakers shifting into a blackout commentary period ahead of a policy meeting next week.


The Fed raised interest rates twice this year in response to steady growth and falling unemployment, but persistently soft inflation data have tempered market expectations for another hike before the year. Higher rates also boost the dollar, in which gold is priced.


Among other metals, December silver SIZ7, +0.17%  fell 1.2 cents, or less than 0.1%, to $17.890 an ounce, while the iShares Silver Trust ETF SLV, +0.72% edged up by 0.5%.


December copper HGZ7, -0.36%  fell 3 cents, or 1%, to $3.036 a pound, adding to its 2.5% weekly fall last week. Copper had been trading at a three-year high at one point last week.


October platinum PLV7, +0.12%  shed $12.30, or 1.2%, to $986.50 an ounce, after settling under $1,000 on Monday for the first time this month. December palladium PAZ7, +0.28% added $11.75, or 1.3%, to $943.40 an ounce.


Source: http://www.marketwatch.com/