Gold price pulls back after previous session’s gains as dollar perks up
London (July 10) Gold futures pulled back early Tuesday, following moves in the dollar that have weighed on the precious metal in recent weeks amid concerns about trade wars between economic superpowers and tightening monetary policy in the U.S.
August gold GCQ8, -0.83% tacked fell $8.10, or 0.6%, to $1,251.50 an ounce, relinquishing all of the gains the commodity scored in the previous session. The most popular fund tracking gold, the SPDR Gold Shares GLD, +0.24% was set to fall 0.4%.
A strengthening dollar proved the most significant headwind for precious metals on Tuesday with one measure of the buck, the ICE U.S. Dollar Index DXY, +0.30% which reflects the greenback’s performance against a half-dozen currencies, was up 0.3% at 93.392.
Gold on Monday accumulated modest gains even as the buck rose, but Tuesday’s early moves put the dollar gauge on pace to rise 0.4% for the week thus far.
Bullion has mostly been in a downtrend that has caused investors and technical analysts to maintain a bearish outlook for the asset that should ordinarily prosper during times of uncertainty, including a spat over trade disputes between the U.S. and its trade partners across the globe. However, the haven asset has shed some of its usual flight-to-safety luster so far.
That downdraft also comes as the Federal Reserve is slated to normalize U.S. monetary policy, lifting benchmark interest rates at least once more in 2018, with higher rates potentially creating more headwinds for gold as the dollar bucks up and as the 10-year Treasury rate TMUBMUSD10Y, +0.41% climbs, eroding some gold demand.
“We’re still not ready to change our bearish posture,” wrote technical analyst Stephen Todd of Todd Market Forecast in a late-Monday research note after gold’s gains on Monday.
Meanwhile, September silver SIU8, -0.99% traded a more severe 1.1%, or 18 cents, lower at $15.950 an ounce. The most popular exchange-traded fund that tracks silver, the iShares Silver Trust SLV, +0.60% weren’t actively traded in the premarket on Tuesday.
MarketWatch
