Gold futures inched higher on Tuesday, looking to stretch their streak of gains to a fifth consecutive session, which would be longest run since January.
Gains in the stock market kept a cap on the gains for the precious metal, but investors remained skittish with no apparent progress made on the trade front and May data on U.S. manufacturing released Monday revealing the slowest pace of expansion in 2½ years.
Gold for August delivery on Comex GCM19, +0.11% tacked on $1, or 0.08%, to $1,328.90 an ounce, with a settlement at that level, if realized, representing bullion’s highest for the most-active contract since late February, according to FactSet data. Futures for the yellow metal are on pace for a fifth straight advance, which would match a similar streak ended Jan. 31.
July silver SIN19, +0.27% meanwhile, rose 2 cents, or 0.1%, to $14.76 an ounce, after rising 1.2% on Monday.
The yellow metal “is now trading back around three-month highs and looking in a strong position, especially if central bank easing is going to become the theme for the rest of the year,” said Craig Erlam, senior market analyst at Oanda.
“The dollar, as ever, will play a big role in how far this will go [for gold] and it is looking vulnerable,” he said in a daily note. The dollar index has found support around the May lows, “but I’m far from confident that will hold for long and a break could be the trigger for another sizeable drop.”
“This should naturally be good news for gold, which typically benefits when the greenback is struggling. There is plenty of potential resistance ahead for gold though but a weaker dollar would clearly help,” said Erlam. In Tuesday dealings, the ICE U.S. Dollar Index DXY, +0.04% was up less than 0.1% at 97.196.
On Monday, the tech-studded Nasdaq Composite Index COMP, +1.35% retreated into correction territory, defined as a decline of at least 10% from a recent peak, amplifying moves into perceived havens like gold and government bonds and commensurately driving yields to fresh lows.
Heightened fear of growing risk factors swirling in markets — notably intensifying tariffs battles between the U.S. China and other international counterparts — and anticipation of weakening economic growth in the U.S. and elsewhere has underpinned bullion buying over the past several sessions.
Lower rates — with the 10-year Treasury note yield TMUBMUSD10Y, +2.33% near its lowest since September of 2017— have helped to support buying in precious metals, which don’t bear a yield.
Bullish gold investors say that bullion’s trade above $1,300 is an upbeat sign in the near term for the asset.
“From a technical point of view the recovery above the psychological threshold of $1,300 represents a first positive element, while the strength shown in the last 48 hours, with the rally up to $1,330 is confirming the bullish scenario,” wrote Carlo Alberto De Casa, chief analyst at broker ActivTrades.
“The next target could now be the resistance area of $1,350-$1,370, a level which has always stopped gold in the last 4 years,” he said.
Other metals saw mixed trading, with July copper HGN19, +0.08% nearly 0.1% lower at $2.649 a pound. July platinum PLN19, +0.27% added 0.1% to $821.50 an ounce and September PAU19, +2.33% added 2.1% to $1,342.30 an ounce.
Among exchange-traded funds, SDPR Gold Shares GLD, -0.05% slipped lower by 0.1%.
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