Metals Stocks

Gold futures settled higher on Monday, but remained below the key $1,800 mark as investors weighed the latest reading on the U.S. manufacturing sector ahead of this week’s Federal Reserve meeting and monthly nonfarm payrolls data.

“Inflation continues to worry central bank officials, with lingering supply-chain issues and high energy prices making a protracted rise in consumer prices more likely than previously thought,” said Ricardo Evangelista, senior analyst at ActivTrades, in a daily note.

Against that backdrop, “the Federal Reserve looks set to announce the beginning of the tapering of its asset purchase program when it holds a policy setting meeting later this week — a scenario that is likely to offer support to the dollar and penalize the precious metal, due to the inverted correlation between the two assets,” he said.

See: Fed seen announcing start of a ‘taper’ of bond purchases this week

The Fed will hold a two-day meeting set to conclude Wednesday with a decision on monetary policy.

Also read: What Federal Reserve tapering means for markets

For now, however, the two levels to watch in the gold market “remain support at $1,725 and resistance at $1,835,” analysts at Sevens Report Research wrote in Monday’s newsletter. “Until one of those levels is violated gold will remain pinned in a sideways trading range.”

Gold for December delivery GC00, +0.65% GCZ21, +0.65% rose $11.90, or 0.7%, to settle at $1,795.80 an ounce on Comex, after trading as high as $1,797.50. The precious metal, based on the most actively traded contract, ended Friday with a weekly decline of 0.7%, according to Dow Jones Market Data, but rose 1.5% in October — the strongest monthly advance since July.

December silver SIZ21, +0.71% SI00, +0.71% was also up 12 cents, or 0.5%, to $24.073 an ounce. The metal on Friday notched the first monthly advance in five months, up 8.6% in October. For the week, silver ended down by about 2.1%.

Gold was pressured last week as the dollar rallied. A stronger dollar can be a negative for gold and other commodities priced in the unit, making them more expensive to users of other currencies. On Monday, however, the greenback, as measured by the ICE U.S. Dollar index DXY, -0.23% was down 0.1%.

Prices for the yellow metal gained more ground Monday following the latest U.S. economic data.

A closely followed index of U.S.-based manufacturing activity inched lower to 60.8% in October from 61.1% in the prior month, the Institute for Supply Management said Monday. The much anticipated monthly data on nonfarm payrolls will be released on Friday.

In other Comex trading, December copper HGZ21, +0.25% rose 0.6% to $4.394 a pound. January platinum PLF22, +4.54% tacked on 4.6% to $1,067.30 an ounce and December palladium PAZ21, +3.57% settled at $2,052.30 an ounce, up 3.6%.

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Myra P. Saefong

Myra P. Saefong, assistant global markets editor, has covered the commodities sector for MarketWatch for 20 years. She has spent the bulk of her years at the company writing the daily Futures Movers and Metals Stocks columns and has been writing the weekly Commodities Corner column since 2005.

William Watts

William Watts is MarketWatch’s senior markets writer. Based in New York, Watts writes about stocks, bonds, currencies and commodities, including oil. He also writes about global macro issues and trading strategies. Before moving to New York, he reported for MarketWatch from Frankfurt, London and Washington, D.C.