Gold price drops for 6th session in past 8 as dollar sticks near 14-year high
New York (Dec 22) Gold prices eased for a third straight session Thursday, adding to their December retreat, even as the dollar slipped from a 14-year high notched earlier this week.
Gold for February delivery GCG7, -0.16% was off $1.50, or 0.1%, at $1,131.70 an ounce, after logging narrow declines on Tuesday and Wednesday and falling in six of the last eight trading sessions.
The ICE Dollar Index DXY, -0.03% fell 0.1% to 102.87 Thursday. The dollar gauge, which measures the strength of the buck against a basket of six currencies, on Tuesday closed at its highest level since December 2002, according to FactSet data.
The dollar may rise and hurt gold prices if there is a good showing from U.S. economic indicators Thursday. Economists are relatively upbeat for revised GDP data for the July-September quarter and durable goods orders for November. Both releases are due at 8:30 ET Eastern time.
The precious metal has fallen 3.2% so far in December, weighed by a rising dollar and higher interest rates. Because gold is priced in dollars, any advances for the greenback make the metal more expensive for other currency holders, presumably cutting their demand. Additionally, rising yields make it more attractive to invest in assets that pay interest, which gold does not.
See: Here’s how dramatically investors have been fleeing gold
“We are trading very much in a range for now and there is no major move. We need to break out of the $1136-$1148 range to form a new trend,” said Naeem Aslam, chief market analyst, at Think Markets.
“The metal could be the most interesting derivative in 2017 as we have a number of uncertainties which will keep investors on their toes,” he said. That includes any further progress on President-elect Donald Trump’s pledges for infrastructure spending and tax changes as well as national elections in Europe.
Read: Gold is nowhere near ready to shine, says Mark Hulbert
For the year, gold and silver are poised for their most robust gains since 2012. Gold is headed for a roughly 6% advance for 2016, boosted by early-year gains scored when expectations for interest-rate increases by the Federal Reserve were more subdued.
But that view changed late year. The price of gold fell back in the wake of Trump’s surprise victory in the U.S. presidential election, which quickly brought hopes for a large fiscal stimulus plan. That outlook prompted upward revisions to expectations for additional monetary tightening by the Fed, which are bullish for the buck. The Fed has penciled in three hikes next year.
Meanwhile, March silver SIH7, -0.62% fell 12 cents, or 0.8%, to $15.86 an ounce Thursday, while high-grade copper HGH7, -1.10% fell 3 cents, or 1.3%, to $2.47 a pound.
January platinum PLF7, -0.48% lost $6.10, or 7%, to $908.30 an ounce. March palladium PAH7, -0.87% gave up $7.05, or 1.1%, to $652.85 an ounce.
As for exchange-traded funds, the SPDR Gold Trust GLD, +0.06% was down 0.2% premarket, while the VanEck Vectors Gold Miners ETF GDX, -0.21% slipped 0.2%.
Source: MarketWatch
