Gold and silver futures marched lower Wednesday as the dollar found traction on rate-hike expectations and U.S. stocks gained on the back of mostly upbeat earnings results.
“Haven” gold tends to move opposite the dollar and riskier stocks, but while gold has been choppy in recent sessions as stock indexes test records, the yellow metal remains underpinned by global growth uncertainty.
August gold fell $16, or 1.2%, to $1,316.30 an ounce. Prices are on track to log their lowest settlement in a month, just a day after marking their highest finish in nearly a week.
“The yellow metal had a huge run in 2016, and is entering a consolidation phase,” said Nico Pantelis, head of research at Secular Investor. “This could last during the summer months, a period known as the ‘summer doldrums’ for the precious metals arena.”
“The price of gold is now on its way towards $1,300, and if this support level breaks, we will probably see $1,280 in short notice,” he said. “We don’t see gold [correcting] much further, as we see this correction as part of a move higher in [the] fall.”
Pantelis said gold could trade up to $1,400 to $1,500 an ounce.
For now, strength in the U.S. dollar contributed some pressure to gold, which is priced in the greenback. The ICE U.S. dollar index most recently was edging modestly higher at 97.12, up less than 0.1%, but it’s up 0.4% for the week and 1.1% for the month so far.