Gold price retreats in shadow of surging stocks

December 4, 2017

New York (Dec 4)  Gold retreated on Monday, its haven status overshadowed as U.S. stocks were on track for a sizable rally and the dollar firmed after weekend passage in the Senate of what’s seen as business-friendly tax changes.

February gold GCG8, -0.53% fell $6.20, or 0.5%, to $1,276.20 an ounce. The exchange-traded SPDR Gold Trust GLD, -0.59%  fell 0.6% premarket.

The ICE U.S. Dollar Index DXY, +0.08%  was up less than 0.1% at 93.13, calming down in recent sessions after it fell nearly 1.6% for November. Stock futures indicated a sharply higher start for the leading averages.

Early Saturday the Senate passed the Republican-sponsored tax reform proposal almost entirely along party lines, which is being viewed as a key victory for President Donald Trump.

Hopes that the Trump administration and Republicans would usher in a business-friendly tax overhaul have been a driver for the stock market’s record-hitting run over the past year. The House and Senate now must agree on a single tax bill before it can be sent to Trump to sign.

“The bill still has to be reconciled with the version approved by the U.S. House of Representatives. All the same, market participants regained their risk appetite as a result, so the gold price fell accordingly,” said Carsten Fritsch, commodities analyst at Commerzbank, in a note.

Gold finished higher on Friday, paring its loss for the week, as the dollar weakened and equities dropped in the wake of news that former national security adviser Michael Flynn pled guilty Friday to lying to the FBI after reaching a deal with the special counsel investigating Russia’s alleged interference in the U.S. election. ABC News said that Flynn was prepared to testify about Trump, in a report later retracted but that sent stocks sharply lower and lifted gold. The Dow Jones Industrial Average DJIA, -0.17%  had ended the month of November above 24,000 for the first time in history.

Investors will get several big pieces of economic data this week, including the nonfarm-payroll report on Friday. On the economic front for Monday, a reading on factory orders for October is slated for release at 10 a.m. Eastern.

Elsewhere on Comex, March silver SIH8, -0.29% fell 5 cents, or 0.3%, to $16.335 an ounce. Prices for the contract logged a weekly loss of 4% last week. The exchange-traded iShares Silver Trust SLV, +0.13%  fell 0.7%.

March copper HGH8, +0.40%  rose 0.4% to $3.1035 a pound, with prices down about 4.1% last week. January platinum PLF8, -0.90%  fell 0.8% to $933.20 an ounce. March palladium PAH8, -0.47%  fell 0.4% to $1,011.95 an ounce.


Silver Phoenix Twitter                 Silver Phoenix on Facebook