Gold heads for second loss in a row but holds above $1,500

Gold prices on Tuesday headed lower, on the verge of notching a second straight decline, as upbeat reports from some of the U.S.’s largest banks, muted signs of inflation and continued progress toward a Sino-American trade pact failed to spur demand for haven-related assets.

“Gold prices are getting dragged down as trade tensions have eased in the short-term and as US earnings season gets off to a great start,” wrote Edward Moya, senior market analyst at Oanda, wrote in a Tuesday research note. “The banks are painting a picture that the US consumer remains strong and that should support fresh record highs with US stocks,” he said.

At least that is the case with the U.S.’s biggest bank, JPMorgan Chase & Co. JPM, +2.33% and Citigroup Inc. C, +2.32%, which both exceeded analysts’ consensus estimates for profits and sales in the last three months of 2019, helping to bolster optimism that has helped to lift U.S. stocks to records and weighed on gold and government bonds.

Gold for February delivery GCG20, -0.37% on Comex was down $5.70, or 0.4%, at $1,544.90 an ounce, after falling 0.6% on Monday, marking its lowest finish for a most-active contract since Jan. 2, FactSet data show.

March silver SIH20, -0.92% lost 20 cents, or 1.1%, to $17.80 an ounce, following a 0.6% decline in the previous session.

The consumer-price index rose 0.2% last month, the Labor Department said Tuesday. Economists polled by MarketWatch had forecast a 0.3% advance. Meanwhile, the increase in the cost of living in the past 12 months rose a few ticks to 2.3%, matching the highest level since October 2018. But price pressures more broadly remained largely muted, likely to give the Federal Reserve little cause to lift rates soon.

On the trade-negotiation front, China will pledge to buy $200 billion of US goods over a two-year period in four industries, according to several reports. This includes $75 billion of manufactured goods, $50 billion of energy products, $40 billion of agricultural products, and $40 billion worth of services.

Elsewhere on Comex, March copper HGH20, -0.09% was trading virtually unchanged at $2.863 a pound, after a 1.7% gain on Monday.

April platinum PLJ20, +0.24% rose less than 0.1% to $982.80 an ounce after a 0.4% loss, while March palladium PAH20, +0.43% picked up 0.6% at $2,090.80 an ounce, with the precious metal extending a climb toward fresh all-time highs.

MarketWatch

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Ed Moya

Ed Moya

Senior Market Analyst at OANDA
With more than 20 years’ trading experience, Ed Moya is a market analyst with OANDA, producing up-to-the-minute fundamental analysis of geo-political events and monetary policies in the US, Europe, the Middle East and North Africa. Over the course of his career, he has worked with some of the world’s leading forex brokerages and research departments including Global Forex Trading, FX Solutions and Trading Advantage. Most recently he worked with TradeTheNews.com, where he provided market analysis on economic data and corporate news. Based in New York, Ed is a regular guest on several major financial television networks including BNN, CNBC, Fox Business, and Bloomberg. He is often quoted in leading print and online publications such as the Wall Street Journal and the Washington Post. He holds a BA in Economics from Rutgers University. Follow Ed on Twitter @edjmoya ‏
Ed Moya