Gold price eases from one-week high as stocks, dollar churn

April 19, 2018

London (Apr 19)  Gold futures eased slightly Thursday from the one-week highs notched a day earlier, but the contract remained confined to the tight trading range seen over the last several sessions, as U.S. stocks drifted higher and the dollar stabilized.

June gold GCM8, -0.04% fell $2.80, or 0.2%, to $1,350.70 an ounce. It settled Wednesday at $1,353.50, the highest since April 11, according to FactSet data.

Gold has been rangebound between $1,310 and $1,360 so far this year absent catalysts that, according to analysts, might include a spike in inflation or a more-aggressive Federal Reserve response with higher interest rates, factors that would be expected to lift the dollar and depress gold prices.

Early Thursday, the ICE U.S. Dollar Index DXY, -0.04%

 was barely moved at 89.64.

There may be little on the economic front Thursday to rattle subdued markets in either direction. A reading on weekly jobless claims and an April figure for the Philadelphia Federal Reserve’s business-conditions index are slated to hit at 8:30 a.m. Eastern Time, with economists polled by MarketWatch expecting 230,000 claims. At 10 a.m. Eastern, a March report on leading indicators is scheduled to arrive.

U.S. stock-index futures pointed to a roughly flat open with stocks on course for a weekly gain on the back of enthusiasm over first-quarter earnings. The S&P 500 components are expected to see earnings growth of 17.3% for the period, the fastest rate of expansion since 2011 and helping to dull demand for less-risky assets including metals.

As for other metals trading, silver’s moves of late have been more pronounced. May silver SIK8, +0.10% slipped about 0.2% to $17.215 an ounce Thursday after putting on a 2.8% surge in the previous session.

“For two months the silver price has been stuck trading in a little sideways trading band between $16.16/$16.86, however this range was smashed [Wednesday] by a huge upside breakout. The technical implications of such a move call for an upside target of $17.56,” said Richard Perry, analyst at Hantec Markets.

Prices for nickel and aluminum traded in London, meanwhile, extended their rally to multiyear highs, driven by the news around Russian sanctions.

Nickel prices hit their highest level since December 2014, on concerns that Russian nickel producer Norilsk Nickel will be included under U.S. sanctions on Moscow that have already led to a rally in aluminum prices.

Moscow, meanwhile, has filed an official complaint to the World Trade Organization, arguing that the 25% tariff on steel, and 10% on aluminum, are “safeguard measures” meant to protect the U.S. economy and not as boost to national security, the Guardian reported.

Around the metals market, May copper HGK8, -0.36%  traded at $3.1535 a pound, down 0.2%. July platinum PLN8, +0.53%  added 0.3% to $949.00 an ounce, while June palladium PAM8, -0.30%  added 0.1% to $1,035.70 an ounce, holding ground at the highest level since late February, with gains tied to U.S. tensions with Russia.

The SPDR Gold Shares GLD, +0.03% exchange-traded fund slipped 0.1%, and the iShares Silver Trust SLV, +2.41%  advanced 0.2%, while the VanEck Vectors Gold Miners GDX, +0.22%  rose 0.5%.


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