Gold futures fall; silver ends at a more than 1-year high

Gold futures fall; silver ends at a more than 1-year high

Silver up a 7th session out of 8, settles at highest since June 2018

Gold ended lower on Tuesday, overshadowed by a stronger U.S. dollar, while silver gained to tally another finish at its highest in more than a year.

Gold for August delivery on Comex GCQ19, -0.08% declined $5.20, or 0.4%, to settle at $1,421.70 an ounce. Prices saw a brief pop higher in the immediate wake of some downbeat economic data, which showed a fall in June U.S. existing home sales.

September silver SIU19, +0.15% however, rose 6.5 cents, or 0.4%, to finish at $16.476 an ounce, marking its seventh gain in eight sessions. That was the highest most-active contract settlement since June 15, 2018, according to FactSet data.

“Firmness in silver prices will draw more and more people with less amount to invest,” said Chintan Karnani, chief market analyst at Insignia Consultants. “Silver is behaving like a low price safe haven and will attract more and more retail investment.”

The trend for silver will depend on next week’s Federal Open Market Committee policy decision and monthly U.S. nonfarm payrolls data, says Karnani. “If silver manages to trade over $16.715 after the FOMC and payrolls data, then $19.825 “will be reached by the end of August.”

For now, however, strength in the dollar put pressure on dollar-denominated prices of gold. The ICE U.S. Dollar Index DXY, +0.04% a measure of the currency against a basket of six major rivals, rose 0.4% to trade near 97.672 after trading at around a one-month high following a deal between President Donald Trump and congressional leaders announced a deal late Monday on a debt and budget agreement that would avert the possibility of a government shutdown or federal default.

A stronger dollar can be a negative for commodities priced in the U.S. unit, making them more expensive to users of other currencies.

The removal of budget-related risk also dented haven-related demand for gold, as did a continued stream of well-received second-quarter results from U.S. companies as earnings season continues, said Edward Moya, senior market analyst at Oanda, in a note.

Meanwhile, “traders have already factored in [an expected] interest rate cut by the Federal Reserve next week,” said Karnani, but the “warlike situation, if any, in the Middle East needs to be closely tracked.”

In other metals trade, October platinum PLV19, +0.19% rose $8.90, or 1%, to $861.60 an ounce, while September palladium PAU19, +0.12% fell $10.60, or 0.7%, to $1,518.60 an ounce. September copper HGU19, +0.17% lost 2.2 cents, or 0.8%, to $2.70 a pound.

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