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Gold is pulling back from 4-month high

Gold futures were set to snap a two-day string of gains early on Wednesday in New York a day after the commodity settled at its highest level in more than four months on the back of the weakness of the dollar.

Gold for February delivery GCG9, -0.28% was $3.90, or 0.3%, lower at $1,242.70 an ounce, following its highest end for the contract since July 25, FactSet data show. March silver SIH9, -0.38% traded 9 cents, or 0.6%, lower at $14.55 an ounce, after that metal finished 1% higher on Tuesday.

CME Group CME, + 0.05%, said US-based equity and interest-rate futures and options products will be closed on Wednesday in observance of the national day of mourning for former President George H.W. Bush. Commodity markets, however, worked on a regular trading schedule, while US-based risk markets were largely  darkened. All other CME Globex markets, which will include energy and metal futures, will be open for the day.

Against this backdrop, assets including gold, may see volatile action, given the lighter than-usual trade, market participants said.

Some market participants attribute gold’s slight retreat on the session to investors who sell some of their holdings after a healthy profit on Tuesday.

“With risk sentiment stabilizing, well kind of, the gold market is taking some profits,” wrote Stephen Innes, a head of trading at Oanda, in a Wednesday research report. “Overall its time to hit the pause button until markets open until after the day of mourning,” he said.

Stock-index futures for the Dow Jones Industrial Average YMZ8, +0.44% DJIA, -3.10% and the S&P 500 ESZ8, +0.60% SPX, -3.24% were tilting slightly higher, attempting to increase after a rout on Tuesday that saw all three main equity benchmarks shed at least 3%.

The fears about a lasting cessation of hostilities between President Trump and Chinese President Xi Jinping after the pair approved a 90-day moratorium between Beijing and Washington on tariff tensions and indications that bond investors have a dim long-term prospect for markets, have combined to upend risk appetite.

 

Source: MarketWatch