Gold edges lower, but remains near a 5-month high

Gold futures edged lower on Monday, but continued to hold ground near a five-month high after posting a strong rally last week when stock-market turmoil fueled haven-related buying.

Gold for February delivery GCG9, -0.34%  on Comex was down 90 cents, or less than 0.1%, at $1,251,70 an ounce, while March silver SIH9, -0.69%  fell 0.2% to $14.67 an ounce.

Gold notched its highest close since July on Friday as it logged its biggest weekly gain since August, all in the wake of market turmoil that sent stocks reeling and pressured Treasury yields and the U.S. dollar.

Gold “losses were limited on expectations that there might be a pause in the [Federal Reserve interest] rate hike cycles in 2019—sooner than expected,” said analysts at ICICI Bank, in a daily market report.

The U.S. economy created 155,000 new jobs in November to keep the unemployment rate at a 49-year low, but hiring fell short of Wall Street expectations, according to data released Friday.

“Not surprisingly, the U.S. nonfarm payroll result for November reduced interest-rate hike prospects for 2019 and, in turn, that undermines the dollar which provides support to gold and other physical commodities,” analysts at Zaner Precious Metals wrote in a note.

Benchmark U.S. stock indexes traded broadly lower Monday after last week’s selloff pushed the S&P 500 SPX, -0.34%  and the Dow Jones Industrial AverageDJIA, -0.38%  into negative territory for the year.

The ICE U.S. Dollar Index DXY, +0.57%  edged up by 0.3%, but continued to trade lower month to date. A stronger dollar can weigh on commodities priced in the greenback as it makes it more expensive to users of other currencies, and vice-versa. Lower bond yields can also be a positive for commodities, which don’t offer a yield.

In other metals trade, January platinum PLF9, -1.09%  was off $6.90, or 0.9%, at $783.50 an ounce, while March palladium PAH9, -0.75%  fell by 50 cents to $1,170.30 an ounce. March copper HGH9, -1.30%  declined 3.4 cents, or 1.2%, to $2.726 a pound.

Among exchanged-traded funds, SPDR Gold Shares GLD, -0.47%  fell nearly 0.2%, while the VanEck Vectors Gold Miners ETF GDX, -0.72%  added 1.2%.



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Ed Moya

Ed Moya

Senior Market Analyst, The Americas at OANDA
With more than 20 years’ trading experience, Ed Moya is a senior market analyst with OANDA, producing up-to-the-minute intermarket analysis, coverage of geopolitical events, central bank policies and market reaction to corporate news. His particular expertise lies across a wide range of asset classes including FX, commodities, fixed income, stocks and cryptocurrencies. Over the course of his career, Ed has worked with some of the leading forex brokerages, research teams and news departments on Wall Street including Global Forex Trading, FX Solutions and Trading Advantage. Most recently he worked with, 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 CNBC, Bloomberg TV, Yahoo! Finance Live, Fox Business and Sky TV. His views are trusted by the world’s most renowned global newswires including Reuters, Bloomberg and the Associated Press, and he is regularly quoted in leading publications such as MSN, MarketWatch, Forbes, Breitbart, The New York Times and The Wall Street Journal. Ed holds a BA in Economics from Rutgers University.
Ed Moya