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Gold futures made modest moves on Thursday, attempting to climb from the roughly 1 ½-year lows hit this week as the U.S. dollar rally paused.
The buck, which has gained over the week, making gold more expensive to investors using another currency, had touched a roughly 14-month peak this week.
“The bull run for the dollar index has eased off a little but we do not see any convincing move for the gold price, which tells us that traders are still very bearish views about the metal,” said Naeem Aslam, chief market analyst with Think Markets. “It is likely that the gold price may continue to grind lower and the next important level to watch out for gold is at $1,150.”
December gold GCZ8, +0.19% inched up by $1.80, or 0.2%, to $1,186.80 an ounce. It closed Wednesday at $1,185, representing the lowest settlement for a most-active contract since early January of 2017, according to FactSet data. Futures, down 2.7% so far this week, were trying for only their second gain in the past six trading sessions.
Gold wavered around the break-even line as a trio of economic reports supported calls for higher U.S. interest rates this year and next, though there was nothing in the data to suggest policy changes would come at a faster clip than the Fed has already projected. Construction on new houses increased by less than 1% in July, reflecting a recent slowdown in building that’s likely tied to higher mortgage rates and growing shortages of skilled craftsmen. Meanwhile, the Philadelphia Fed index sinks in August to its lowest reading in 21 months, while weekly jobless benefits claims declined.
A popular metals exchange-traded fund, the SPDR Gold Trust GLD, +0.45% was up 0.5%, while an ETF that tracks gold miners, the VanEck Vectors Gold Miners ETF GDX, +0.40% tacked on 1%.
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Gold futures have traded down nearly 10% for the year to date, failing to draw the support that might be expected amid geopolitical turmoil around trade war worries and Turkey’s financial crisis, as focus remains almost exclusively pinned on the stronger dollar. The precious metal has languished just below the psychologically-important $1,200 level after dropping below this line for the first time in more than a year on Monday.
As for gold-influencing currency play, the Turkish lira rose against the dollar on Thursday, setting the troubled currency up for its third straight advance as hopes grew that the currency crisis in the country was stabilizing. On Wednesday, it was reported that Qatar had pledged $15 billion in direct investments for Turkey, in what could be part of a lifeline for an economy struggling with high inflation and debt.
Beyond the lira, the U.S. dollar index DXY, -0.28% which measures the buck against a half-dozen rivals, fell 0.3% to 96.42, although it continues to trade near its highest level since June 27, 2017. The index was up 4.7% in the year to date, according to FactSet.
From here, Michael Armbruster, managing partner at Altavest, said there are “several highly correlated catalysts that could trigger a rally in gold,” including a pullback in the dollar index and a rally in silver, “and to a lesser extent, copper.”
“The commodities are already starting to bounce today, let’s see if their gravitational pull has an effect on gold,” he said.
September silver SIU8, +2.26% attempted to take back a sliver of Wednesday’s steep drop. It was up 27 cents, or 1.9%, at $14.725 an ounce. Silver futures fell nearly 4% on Wednesday—the metal’s largest one-day slump since mid-June.
September copper HGU8, +3.01% added 6.7 cents, or 2.6%, at $2.627 a pound. It shed 12.2 cents, or 4.5%, to $2.56 a pound Wednesday—the most severe daily decline since December.
October platinum PLV8, +2.82% clawed up from its lowest point in roughly a decade, trading up $19.30, or 2.5%, at $791.20 an ounce after a 3.7% fall on Wednesday. September palladium PAU8, +4.96% rose $39.70, or 4.7%, to $876.90 an ounce, following Wednesday’s 5.9% drop.
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