Gold futures on Monday traded modestly higher as the precious metal attempted to halt a two-session slide that has come as assets perceived as risky have rallied, dulling its appeal.
However, some commodity experts remain bullish and point to its trade above the $1,500-an-ounce mark as the demarcation line between bullish and bearish momentum in the commodity.
December gold GCZ19, +0.24% gained $6, or 0.4%, to trade at $1,521.50 an ounce, after notching the most-active contract fell about 0.9%, for the week, according to FactSet data.
Silver for December delivery SIZ19, +0.64%, meanwhile, shed a penny, or 0.4%, to $18.30 an ounce, following a 1.2% slump for the week for gold’s sister metal.
“The main trend remains positive, even though prices are now playing with the psychological level of $1,500 and there could be space for a further correction to around $1,475, without affecting the main bullish trend,” wrote Carlo Alberto De Casa, chief analyst at brokerage ActivTrades, in a daily research note.
As for silver, which had enjoyed a powerful uptrend, up more than 11% last month — outperforming gold’s monthly rally last month, up 6.4% — De Casa says its gains may have come too quickly and expects that prices for the gray metal “are likely to consolidate around these levels, before any further rebound attempt.”
Gold and silver have been supported by worries about anemic economic growth internationally and concerns that, combined with a Sino-American trade war, sluggish expansion may wash up on U.S. shores. On top of that, bond yields globally have offered rates that are ultralow or less than 0%, which also has bolstered appetite for precious metals which don’t bear a yield.
Prices for gold have climbed 18.8% so far this year, while those for silver are up 17.7% over the same period. By comparison, the Dow Jones Industrial Average DJIA, +0.06% has climbed 14.9% year to date, while the S&P 500 index SPX, +0.18% has advanced 18.8% thus far in 2019, FactSet data show as of Friday’s close.
Last week, stocks gained some traction higher as Federal Reserve Chairman Jerome Powell said the job report is a sign of continued strength in the labor market. He also said the outlook for the economy remains favorable and the Federal Reserve is “not forecasting or expecting a recession.”
Closely watched employment data on Friday showed that the U.S. created a lackluster 130,000 new jobs in August, adding to evidence that hiring has slowed sharply in 2019. The increase in new jobs fell well short of the 170,000 MarketWatch forecast.
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