Gold prices suffered from sharp losses Wednesday, on the back of a stronger dollar and a bounce for beaten-down equities, but month-to-date losses for benchmark U.S. stock indexes have helped pull prices for the precious metal up in October.
Gold for December delivery GCZ8, -0.84% on Comex fell $11.20, or 0.9%, to $1,214.10 an ounce, poised for its lowest settlement in three weeks. For the month, however, prices trade roughly 1.5% higher, based on the most-active contracts, FactSet data show. A gain for the month would follow six monthly declines in a row.
December silver SIZ8, -1.15% fell 18.7 cents, or 1.3%, to $14.275 an ounce, on track for the lowest finish in about six weeks. It trades down about 2.9% for the month.
“A firmer U.S. dollar and a noticeable recovery on the global stock markets are weighing on [the gold] price,” wrote analysts at Commerzbank in a Wednesday note. “Thus the technical picture has also become somewhat more gloomy again, which could make short-term-oriented investors more reluctant to bet on a rising gold price.”
The weakness saw gold fall below its 100-day moving average just below $1,220 an ounce, they noted. At the same time, memories of the mid-October pop higher by the metal means “it remains to be seen whether speculators will make any renewed attempts to short gold—at the time, many speculative investors were caught wrong-footed when the price suddenly surged,” forcing them to cover short positions and adding to the rally.
U.S. stock indexes moved higher on Wall Street after a strong Tuesday bounce that pushed the S&P 500 SPX, +1.60% and Dow Jones Industrial Average DJIA, +1.39% back into positive territory for 2018. Still, stocks have suffered a brutal and volatile October that is left the S&P 500 down 6.8% for the month.
The dollar edged up versus major rivals, leaving the ICE U.S. dollar index DXY, +0.09% up 0.1% at 97.129—trading up 0.8% so far this week and poised for a monthly rise of 2.1%. A stronger dollar can be a negative for commodities, making them more expensive to users of other currencies.
The SPDR Gold Shares ETF GLD, -0.86% was off 1% but on track for a 1.7% monthly rise. The iShares Silver Trust ETF SLV, -1.47% was off 1.5% premarket and held a 2.3% month-to-date decline through Wednesday.
Also on Wednesday, December palladium PAZ8, +1.13% rose 1.5% to 1,070.40 an ounce after posting five straight sessions of losses. January platinum PLF9, +0.00% was up less than 0.1% to $839.50 an ounce.
December copper HGZ8, +0.28% was up 0.2% at $2.671 a pound.
