Weaker gold price can’t extend the rally built on oil’s price jump

New York (Nov 7)  Gold futures pulled back Tuesday, unable to extend a Monday move that marked the biggest single-day gain for bullion since September 25.

The stock market’s aim at fresh records and general dollar strength dulled demand for precious metals, which had been swept up in Monday’s gains across the commodity complex, as a surge in prices of crude oil offered some signs of a potential increase in inflation, bullish for precious metals’ prices. Oil bulls caught their breath in a quieter Tuesday session after driving prices to a nearly two-year high after a string of high-profile arrests in Saudi Arabia.

Early Tuesday, December gold GCZ7, -0.32% slipped $4.80, or 0.4%, to $1,276.70 an ounce. The exchange-traded SPDR Gold Trust GLD, +0.85%  fell 0.4% premarket.

The ICE U.S. Dollar Index DXY, +0.37% which measures the buck against a half-dozen rivals, was up 0.3% at 95.09. The index and gold typically move inversely, as a firmer dollar makes gold less attractive to investors using another currency.

Gold also slipped as Treasury yields TMUBMUSD10Y, +0.39%    stabilized after their drop to start the week, driven lower in part as President Trump’s Asia trip this week, where North Korean tensions will feature, leaves some uncertainty hanging over financial markets. Trump flew into South Korea on Tuesday, the closest he has come to the so-called frontlines of the nuclear standoff with the North.

In other metals, silver for December delivery SIZ7, -1.10%  was down 23 cents, or 1.3%, to $17.005 an ounce. The contract’s 2.4% single-day move on Monday was its best since Nov. 1 when it jumped 2.9%. The exchange-traded iShares Silver Trust SLV, +2.20%  was down 1.3% premarket.

“Not only was silver pulled up by gold yesterday, its gains were also twice as pronounced,” Commerzbank commodities analysts led by Carsten Fritsch said in a note. “Silver... is only just below the 200-day moving average. Any rise above this mark could spark technical follow-up buying and lend further buoyancy to the silver price.”

Elsewhere, December copper HGZ7, -0.84%  fell 3 cents, or 1%, to $3.126 a pound. January platinum PLF8, -0.97% fell $8.80, or 0.9%, to $926.20 an ounce, while December palladium PAZ7, +0.10%  rose $1.40, or 0.1% to $996.50 an ounce.

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