Gold moves up from low of the year, tracking higher oil and weaker stocks

April 22, 2019

London (April 22)  Gold prices pushed up from the four-month low reached in recent sessions, in part as oil gains lifted the specter of inflation risk, against which gold can act as a hedge, and as stock futures pointed to a lower start for riskier assets.

A firmer dollar was limiting the metal’s upside, however.

Gold for June delivery GCM9, +0.37%  rose $5.30, or 0.4%, at $1,281.30 an ounce early Monday. It settled Thursday at $1,276, the lowest finish for a most-active contract since Dec. 26, according to FactSet data.

Gold lost 1.5% for the holiday-shortened week, with financial markets closed for Good Friday. That marked gold’s fourth weekly loss in a row, with a jump in U.S. retail figures providing support for the dollar and dulling the appeal of the precious metal.

The SPDR Gold Shares ETF GLD, +0.07%  edged higher Monday after it fell over 1% lower for last week.

Oil prices surged on Monday amid reports the U.S. will announce the end of waivers for countries to import Iranian oil, as part of a bid by the Trump administration to push Iran’s exports to zero. West Texas Intermediate crude for May delivery CLK9, +2.34% CLK9, +2.34% surged $1.50, or 2.3%, to $65.50 a barrel.

The ICE U.S. Dollar Index DXY, -0.05%  was up 0.3%.

U.S. stock futures fell as investors returned from a long holiday weekend to face a big week for earnings and data, along with those climbing oil prices. Dow Jones Industrial Average futures YMM9, -0.30%  and S&P 500 futures ESM9, -0.31%  fell 0.2%.

The longer the price of gold can stick above $1,275, the more likely it is to move higher from here, boosted by “the substantial risk premia in global equity markets,” said Stephen Innes, head of trading at SPI Asset Management.

“The market is not entirely convinced we can push higher from current stock market levels, while cross-asset traders are very aware not to run positions too far ahead of economic realities,” he said. “While I expect gold prices to fall a bit more and test the critical $1,260 level as risk sentiment continues to improve on the back of a Q2 global upcycle, in these uncertain markets you have to be prepared to flip on a dime...”

In other metals trading, May silver SIK9, +0.33%  added less than 1 cent, or 0.4%, at $15.015 an ounce, after logging a weekly loss of less than 0.1%.

May copper HGK9, -0.67% fell 0.4% to $2.91 a pound, with prices settling 0.9% lower last week. June palladium PAM9, +1.24%  added 1.3% to $1,416.60 an ounce, posting a rise of 3.6% for last week, while July platinum PLN9, +1.27%  rose 1% to $912.60 an ounce, after ending 0.6% higher for last week.


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