An earlier version of this story misspelled the first name of the chief analyst at ActivTrades. This has been corrected.
Gold futures settled higher on Thursday, a day after a surge by the U.S. dollar prompted the precious metal to suffer its worst daily decline in nearly three weeks.
Gold moved higher “due to tepid, dovish GDP data” covering the second quarter, with the market anticipating the same for the third quarter, said Jeff Wright, executive vice president of GoldMining Inc. The data showed the economy grew at a 2% annual pace from April to June, unchanged from the previous estimate.
For now, gold is “holding $1,500 with potential to head towards $1,550 in near term,” Wright told MarketWatch. Prices are “still poised to move higher quickly, based on any new impeachment developments, safe-haven buying on Iranian developments [and] if anything new comes to light.”
Gold for December delivery GCZ19, -0.02% on Comex edged up $2.90, or 0.2%, to settle at $1,515.20 an ounce, while December silver SIZ19, -0.93% fell 16.1 cents, or 0.9%, to $17.912 an ounce.
The risk of impeachment against U.S. President Donald Trump may be seen as one of the supportive elements for gold, said Carlo Alberto De Casa, chief analyst at ActivTrades.
Gold is also holding onto the “psychological threshold of $1,500,” in a “scenario where central banks are still buying the precious metal,” which is also bullish for prices, he wrote in a daily note. “Moreover, any corrections of the stock market could give further fuel to the rally already seen in the last few months.” U.S. benchmark stock indexes traded lower on Thursday, boosting investment demand for gold.
Gold fell $27.90, or 1.8%, on Wednesday, its biggest one-day decline since Sept. 5. The ICE U.S. Dollar Index DXY, +0.17% posted its biggest one-day rise in around three months on Wednesday, while U.S. stocks and bond yields rose, dulling demand for gold.
A stronger dollar can be a negative for currencies priced in the commodity as it makes them more expensive to users of other currencies, though the dollar index traded little changed in Thursday dealings. Rising bond yields can also be a negative, increasing the opportunity cost of holding non-yielding assets like commodities. Treasury yields moved lower Thursday.
Analysts said bulls might find encouragement from signs of bargain hunting interest as gold, which has rallied in 2019, but pulled back.
Holdings in gold exchange-traded funds tracked by Bloomberg “were topped up by over 22 tons – their biggest daily inflow in three months,” wrote analysts at Commerzbank. “For the first time since February 2013, ETF holdings are thus above 2,500 tons again.”
The gold-backed SPDR Gold Shares exchange-traded fund GLD, -0.03% was up 0.3% in Thursday dealings.
In other metals trade, October platinum PLV19, +0.74% rose 0.9% to $936.10 an ounce, while December palladium PAZ19, +1.77% added 1.9% at $1,642.90 an ounce.
December copper HGZ19, -1.36% fell 1.3% to $2.5775 a pound.