Gold prices settled modestly lower on Tuesday, following gains in the last two sessions, as stocks climbed on the back of upbeat earnings and the dollar drifted a bit higher, with news on the geopolitical front quiet for now.
June gold GCM8, -0.16% eased back by $1.20, or just under 0.1%, to settle at $1,349.50 an ounce, giving back about half of Monday’s 0.2% gain. Gold tallied a rise of roughly 0.8% last week, after ending Wednesday at the highest finish since late January. May silver SIK8, -0.04% settled at $16.787 an ounce, up 0.7%.
Gold was held back Tuesday “first and foremost because of a dollar recovery, and secondly because of the equity market rally, which has reduced the appeal of safe-haven assets,” said Fawad Razaqzada, technical analyst at Forex.com. “However, with the Syrian and Russian situations lurking in the background, the dips remain shallow—for now, anyway.”
The ICE U.S. Dollar Index DXY, +0.05% which measures the greenback against six major rivals, rose 0.1% at 89.54.
Stocks rose Monday, and continued higher Tuesday, on a relief rally pinned on hopes the U.S. may not be dragged into a deeper conflict with Syrian allies Russia and Iran. Investors also focused on some upbeat earnings reports.
Elsewhere, U.S. and U.K. officials warned that Russia has increased cyberattacks on American and British companies and government agencies. Relations between the three countries have been strained since the U.S., France and Britain launched missile attacks on the chemical-weapons facilities of the Russian-supported Syrian government.
A lack of escalation in the trade tensions between China and the U.S. has also emboldened investors. That confidence may take a knock on news the U.S. is searching for ways to retaliate against Beijing for its measures restricting access for American tech companies to the Chinese market.
Among the Fed officials who spoke Tuesday, San Francisco Fed President John Williams, who has said he backs three or four gradual interest rate rises this year, said that he worried about the continued uncertainty from worries surrounding the trade spats the U.S. is finding itself it.
Separately, Fed Vice Chair for Financial Supervision Randal Quarles said here is no question the Volcker rule, the controversial measure to prohibit banks from trading for their own accounts, has been harmful to capital markets. Chicago Fed President Charles Evans, meanwhile, said that he doesn’t foresee an outsized risk of a breakout in inflation.
Among economic data released Tuesday, U.S. housing starts ran at a seasonally adjusted annual pace of 1.32 million in March, up 2% compared with February. Industrial production in March rose 0.5% and capacity utilization edged up to 78%—the highest rate in three years.
International Monetary Fund on Tuesday lifted its U.S. growth estimate for 2018 to 2.9% and its 2019 estimate to 2.7%.
In other metals trading, May copper HGK8, +0.75% settled at $3.08 a pound, down 0.5%. July platinum PLN8, +0.35% added 0.9% to $940 an ounce, while June palladium PAM8, +0.13% added 0.1% to $1,005 an ounce, holding ground at the highest level since late February as U.S. tensions with Russia threaten palladium supplies.
The metals market also saw good news from major metals importer China, with the nation’s annual economic growth coming in at 6.8% in the first quarter, “which was slightly higher than expected and on pace with 2017’s gross domestic product growth rate,” said Kitco.com’s Wyckoff.
Among exchange-traded funds, the SPDR Gold Shares GLD, +0.09% traded flat, but the iShares Silver Trust SLV, +0.51% edged up by 0.5%, while the VanEck Vectors Gold Miners GDX, +0.57% rose 0.7%.
