Copper prices scores back-to-back session gains
Gold futures ended slightly lower on Monday, with U.S. benchmark stock indexes on track to notch record levels and dulling demand for haven gold.
The yellow metal, however, held ground above the key $1,500 level for third straight session as commodity investors harbor doubts about U.S. economic vitality.
The U.S. Federal Reserve “is talking up a ‘pause’ in its rate cuts, and hopes of a trade deal keep making headlines,” said Adrian Ash, director of research at BullionVault.
However, “global manufacturing remains weak, geopolitical uncertainty is worsening, and most major government bonds continue to yield less than the pace of inflation,” he told MarketWatch “That’s keeping a solid bid under gold as the opportunity cost of owning it remains negative.”
Gold for December delivery GCZ19, -0.32% on Comex inched down by 30 cents, or 0.02%, to settle at $1,511.10 an ounce after notching a 0.4% weekly advance based on the most-active contracts.
December silver SIZ19, -0.09% settled 1.4 cents, or 0.08%, higher at $18.066 an ounce, following a 1.1% weekly gain booked on Friday.
Gold prices settle with a modest loss as stocks headed toward records Monday following a hotter-than-expected jobs report on Friday showed 128,000 jobs created in October. The S&P 500 SPX, +0.37%, Dow Jones Industrial Average DJIA, +0.42% and the Nasdaq Composite Index COMP, +0.56% were poised to all hit new highs as gold futures settled.
Gold prices tend to fall when risk assets like equities are on the rise, and vice versa.
Still, gold has managed to hold above the key psychological level of $1,500. Naeem Aslam, chief market analyst at ThinkMarkets, said that despite bullish moves for a stocks, the health of the U.S. economy remains a question for some gold investors.
“It is important to keep in mind that the overall US economic docket does paint a pessimistic picture,” he wrote in a Monday report.
Indeed, the Institute for Supply Management’s October manufacturing activity index came in at 48.3% in October, below expectations for a 49% reading, but above the 47.8% seen in September. Any reading below 50% indicates contraction.
“If manufacturing continues to suffer it would take down the labor market and the only solution to this problem is the cease-fire between the US and China,” Aslam said.
The strategist said that gold holding above $1,500 for an extended period is a bullish sign for those upbeat on gold prices.
Among other metals trades on Comex, prices for copper finished higher, with the December futures contract HGZ19, +0.45% up 0.7% at $2.671 a pound.
January platinum PLF20, +0.04% ended at $938.70 an ounce, down 1.6%, while December palladium PAZ19, +0.11% fell by 1.8% to $1,752.80 an ounce.