Gold futures declined Monday, with strength in the U.S. stock market fueling the precious metal’s fall below the psychologically important level of $1,500 an ounce. Traders were awaiting this week’s Federal Reserve policy meeting, which could determine trading for a number of assets, including bullion.
“A bullish U.S. stock market that is near record highs is limiting buying interest in the safe-haven metals,” said Jim Wyckoff, senior analyst at Kitco.com.
The S&P 500 index SPX, +0.51% opened at a record high Monday, with investors looking to a busy week of earnings and a U.S. central bank that is expected to ultimately opt for another cut to interest rates.
Gold for December delivery GCZ19, -0.68% on Comex fell $10.20, or 0.7%, to $1,495.10 an ounce, with prices poised to finish below $1,500 for the first time since Wednesday. December silver SIZ19, -0.34% edged down 7.1 cents, or 0.4%, to $17.855 an ounce.
The Fed is widely expected to deliver another quarter-point cut to its benchmark interest rate when policy makers conclude a two-day meeting on Wednesday.
Taking a look at the bigger picture for the precious metals, “the downside in gold and Silver Markets will be limited as their technical chart postures remain overall bullish,” Wyckoff wrote in a daily note.
Gold bulls’ next upside price objective is “to produce a close in December futures above solid resistance at $1,543.00,” he said. “Bears’ next near-term downside price breakout objective is pushing December futures prices below solid technical support at last week’s low of $1,484.00.”
U.S.-China trade talks also remain in focus, with Washington and Beijing making noises that suggest they may be nearing agreement behind a so-called phase one deal, which could be detrimental for gold prices, Innes said. Gold found support earlier this year as worries around trade sparked sustained bouts of demand for traditional havens.
December copper HGZ19, +0.17% gained 0.4% to $2.6865 a pound.