Gold futures finish lower Thursday to suffer a fourth consecutive loss, as the precious metal continued to be walloped by recent momentum in the U.S. dollar.
August gold GCQ8, -0.62% fell $5.10, or 0.4%, to settle at $1,251 an ounce—the lowest settlement for a most-active contract since Dec. 13. The four consecutive session losses also marked the lengthiest selloff since a four-day slide ended Feb. 7, according to FactSet data.
The most popular exchange-traded fund that tracks gold, the SPDR Gold Shares GLD, -0.43% has fallen 1.8% so far this week and was looking at a 4% drop in June, along with a 4.4% year-to-date retreat.
“The gold market has a feeling of being oversold, but persistent strong U.S. dollar is keeping a lid on any modest recovery rally in face of ‘so-so;’ economic news” Thursday, which should have been support for the precious metal, said Jeff Wright, executive vice president at GoldMining Inc.
U.S. economic news Thursday was downbeat. Data revealed that growth in the U.S. economy in the first quarter was lowered to 2% from 2.2%. Weekly initial jobless claims climbed by 9,000 to 227,000.
Wright said he still believes “gold is undervalued and can recover $1,300 in second half of 2018 as the Trump administration will look to find a solution on trade…and back down on further tariffs.”
And “gold needs a path where U.S. dollar strength can temper as safe haven demand and status is clearly not present,” he added.
Dollar-pegged gold has decidedly turned lower even as uncertainty over global growth and anxieties about escalating trade tensions—factors that would typically provide a lift for the commodity—have intensified.
The current dynamic in gold has led some investors to wonder if the precious metal has lost its efficacy as a traditional haven asset.
Gold prices have lost 1.4% so far this week and 4% so far in June. Meanwhile, the closely watched equity benchmark, the Dow Jones Industrial Average DJIA, +0.46% which tends to climb as gold falls, has shed 1.6% this week, and is on track for a monthly decline of 0.9%.
“The yellow metal, which usually rises in times of political turmoil, has hardly seen any demand and has fallen by almost 4% in the past two weeks, coming under pressure due to the rising dollar and hawkish stance by the [U.S.] Federal Reserve,” analysts at ICICI Bank wrote in a Thursday note.
Read: Here’s what may be eroding gold’s traditional haven status
The dollar, as measured by the ICE U.S. Dollar Index DXY, +0.00% boasts a weekly gain of 0.7% and is up 1.3% so far in June.
Elsewhere, September silver SI1, -1.66% the most active contract, fell by 1.2% to $16.041 an ounce. Silver is poised for weekly and monthly declines of around 3%
The most popular exchange-traded fund that tracks silver, the iShares Silver Trust SLV, -0.69% was down 0.5% Thursday, trading down 2.7% month to date.
September copper HGU8, -1.55% lost 1.2% to $2.972 a pound. October platinum PLV8, -1.22% declined by 0.8% to $855.20 an ounce, while September palladium PAU8, -1.35% ended at $930.90 an ounce, down 1.4%.
