Gold futures settled lower on Monday for a sixth straight session, marking the longest streak of daily declines in about two years.
U.S. stocks gave up earlier gains and turned negative as “investors have not bought” the idea that a deal on U.S.-China trade is near, said Fawad Razaqzada, market analyst at Forex.com. The turn lower for stocks prompted gold to only briefly trim earlier losses.
The dollar has remained supported for now and “as a result, safe-haven gold has not been able to benefit in a meaningful way yet,” he said. Still, “the precious metal was testing a key support area in the $1,285 region,” an area it has previously rallied from. “So, it could potentially take off from here again, especially if stock market bulls refuse to buy this latest dip.”
April gold GCJ9, -0.91% fell $11.70, or 0.9%, to settle at $1,287.50 an ounce, with the most-active contract at its lowest finish since Jan. 24, according to FactSet data. It was down a sixth straight session, the longest stretch of declines since the nine-session fall ended March 10, 2017, according to Dow Jones Market Data. For last week, bullion lost about 2.5%.
Colin Cieszynski, chief market strategist at SIA Wealth Management, told MarketWatch that data showing U.S. construction spending dropped 0.6% in December appeared to lead the move lower for stocks.
“This number with other recent signs of weakness like last week’s retail sales figure appears to have spooked investors,” he said. “Since this is more related to the U.S. domestic economy and not political or market tensions, gold hasn’t attracted renewed interest.”
Gold-backed exchange-traded fund SPDR Gold Shares GLD, -0.27% was down 0.2% after dropping 2.3% for last week.
Futures dropped below the $1,300 mark on Friday to settle at their lowest in a month and half, down over 2% for the week — the sharpest weekly fall since August. Broad risk-on sentiment, which boosted U.S. and global stocks, as well as strength in the U.S. dollar, worked to dull demand for the haven precious metal then and again on Monday.
The gold market “now is in consolidation mode,” said Peter Spina, president and chief executive officer of GoldSeek.com. “The potential for a drop towards $1,250, perhaps not all the way to $1,250, looks under way.”
Read: Why gold fell in February, but is still on a long-term track to reach $2,000 an ounce
“Seasonal factors [are] not in gold’s favor at moment, but will shift as we go through March,” Spina said. “So looking for a couple of weeks of weakness, consolidation until the market can regain its bullish momentum. That said, conditions are getting very oversold here and can stage a large upside move.”
Trade news remained in focus. Citing sources, a report in The Wall Street Journal said Washington and Beijing could reach a deal as early as this month. Reports said the pact would end most U.S. tariffs levied against China in exchange for the latter following up on its own promises to allow in more U.S. exports, among other measures.
The deal has yet to be completed and hurdles remain on both sides, but a formal agreement could be reached at a summit — likely around March 27 — between President Donald Trump and Chinese President Xi Jinping, those sources said. China’s economy will also be in focus this week with the National People’s Congress due to kick off and officials expected to announce growth targets.
The dollar, as measured by the ICE U.S. Dollar DXY, +0.24% was firmer, making gold less appealing to investors using another currency. The index was up 0.2% as gold futures settled.
Rounding out metals trading, May silver SIK9, -1.02% settled at $15.105 an ounce, down 1%. The contract shed around 4.1% for the week. May copper HGK9, -0.67% fell 0.8% to $2.909 a pound after a narrow loss for the week just concluded.
April platinum PLJ9, -2.88% shed 2.9% to $838.90 an ounce, after a weekly rise of 2.1%, while June palladium PAM9, -1.06% fell 1.4% to $1,485.10 an ounce after it gained 3% for last week.
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