Gold futures moved lower in back-to-back sessions Tuesday, trading at their lowest in over a week as a prevailing tide of investors continued to take their chances on stock market upside and snubbing haven assets.
Gold eased even as a broad measure of the dollar also pulled back, bucking their typically inverse relationship.
Gold for December delivery GCZ7, -0.37% fell $5.10, or 0.4%, to $1,330.60 an ounce. The contract settled Monday at $1,335.70 an ounce, the lowest in over a week, according to FactSet. The SPDR Gold Shares ETF GLD, -1.39% fell 1.5% premarket.
The retreat for gold followed its finish Friday at $1,351.20 an ounce, the highest since Sept. 6, 2016 for a most-active contract, according to FactSet. The metal gained 1.6% last week, chiefly driven by concerns that North Korea was preparing to conduct another missile test over the weekend to mark the country’s Foundation Day. The weekend passed without a test. And new sanctions against North Korea agreed by the UN Security Council Monday were not as wide-ranging as the U.S. had originally demanded.
“This is clearly a relief for market participants and is generating higher risk appetite,” said Carsten Fritsch, commodities analyst with Commerzbank, in a note.
“The continuing inflows into gold ETFs are proof that investors still feel some need for security, however,” he said.
The U.S. dollar was dragged down against the British pound in particular on Tuesday, with sterling hitting its highest level against the greenback this year after a strong U.K. inflation report raised the prospects for the Bank of England lifting interest rates sooner than later.
The pound’s rally helped tug down the broader ICE U.S. Dollar index DXY, +0.11% by less than 0.1%, to 91.85. The index remained near the 2 1/2-year lows hit Friday despite Monday’s bounce.
On the data docket Tuesday is a reading on job openings for July, the report known as JOLTS, scheduled for release at 10 a.m. Eastern.
The market’s Federal Reserve guessing game continues with speakers shifting into a blackout commentary period ahead of a policy meeting next week.
The Fed raised interest rates twice this year in response to steady growth and falling unemployment, but persistently soft inflation data has tempered market expectations for another hike in December. Almost no one expects action next week, leaving the year’s last committee gathering as the potentially live meeting. Gold is highly sensitive to rising U.S. interest rates, as they increase the opportunity cost of holding non-yielding bullion. Higher rates also boost the dollar, in which gold is priced.
December copper HGZ7, -1.19% fell 3 cents, or 0.9%, to $3.04 a pound, adding to its 2.5% weekly fall last week. Copper had been trading at a three-year high at one point last week.
October platinum PLV7, -1.03% shed $8.30, or 0.8%, to $990.50 an ounce, after settling under $1,000 on Monday for the first time this month. December palladium PAZ7, +0.57% tipped higher in early action.