Gold futures shifted gears to turn lower Tuesday, after touching their highest intraday level in about two weeks.
Strength in U.S. Treasury note yields and the stock market pressured prices for the precious metal ahead of what are expected to be dovish statements from global central banks later this week that may provide renewed support for gold.
“There is a lot of clutter in the market impacting gold,” Jeff Wright, executive vice president of GoldMining Inc., told MarketWatch.
U.S. industrial production numbers were lower than expected for August but still positive, and Empire State manufacturing data was well past estimates for September, so economic data were mixed, he said, adding that there are also central bank policy meetings to consider this week.
The Federal Reserve will conclude its two-day meeting on Wednesday with a statement on monetary policy, while other policy decisions from Bank of England and the Bank of Japan will follow on Thursday.
“We need a definitive FOMC statement with clear guidance on inflation. This will propel gold higher if dovish,” said Wright.
Investors expect global policy makers to promote a regime of low interest rates for a prolonged period to combat COVID-19, which could lift both gold and stocks further, commodity analysts forecast.
“Against this backdrop, these central banks will very likely convey a dovish message to the markets, which should mean higher stock and gold prices, everything else being equal,” wrote Fawad Razaqzada, market analyst at ThinkMarkets in a daily note.
For now, December gold GCZ20, -0.23% GC00, -0.23% was down $2.70, or 0.1%, at $1,961 an ounce after tacking on 0.8% on Monday. The contract climbed Tuesday to as high as $1,982.40, the highest intraday level since Sept. 1.
Among other metals, December copper HGZ20, -0.45% traded at $3.0525 a pound, down 0.5%. October platinum PLV20, +0.85% tacked on 0.8% to $966.50 an ounce and December PAZ20, +1.14% traded at $2,341.20 an ounce, up 0.7%.
Analysts said that upbeat data from China, one of the largest importers of precious and industrial metals, may offer further momentum for the industry metals complex. Total retail sales of consumer goods grew 0.5% year-over-year last month, according to China’s National Bureau of Statistics.