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After trading modestly higher over the past two days, gold edged lower on Wednesday as the U.S. dollar found its footing following a brief pullback.
Price action
-
Gold futures
GCQ22,
-0.26% GC00,
-0.26%
for August delivery were down $3.70, or 0.2%, to $1,707 an ounce. -
Silver futures
SIU22,
+0.38% SI00,
+0.38%
for September delivery inched up by 15.2 cents, or 0.8%, at $18.87 per ounce. -
Platinum
PLV22,
-1.09%
for October delivery was down $7.60, or 0.9%, at $851.30 an ounce, while Palladium
PAU22,
-0.04%
for September delivery added $5.20, or 0.3%, at $1,859.50 an ounce. -
Copper
HGU22,
+1.25%
for September delivery rose 4.4 cents, or 1.3%, to $3.335 per pound.
What analysts are saying
The dollar’s retreat against the euro has helped ease the pressure on gold, but still, the outlook for metals remains bearish as the uptrend for the dollar
EURUSD,
and for Treasury yields, remain intact.
“A rebound in the U.S. dollar index at mid-week and lower crude-oil prices are bearish daily outside market forces” Wednesday, said Jim Wyckoff, senior analyst at Kitco.com.
“There has been a ‘collapse in volatility’ on the daily bar chart, which suggests a significantly bigger price move is coming soon in gold — possibly this week,” he said in his daily commentary. “Given that gold prices are trending lower on the daily chart, odds favor that bigger price move being on the downside.”
Meanwhile, a team of currency analysts at ING said the greenback’s retreat was inspired by a recovery in risk sentiment which helped U.S. stocks achieve their strongest daily gain in a month, while small cap stocks notched their best day in 18 months.
“Our view is that even if the dollar did bottom out in the past week, the path to a sustained depreciation remains challenging, and would most likely be very gradual from this point on,” the team wrote.
The big question now is whether gold can hold above $1,700 after the yellow metal declined for five straight weeks through Friday.
