Gold futures fell on Thursday after the precious commodity notched a fresh six-year high Wednesday, prompted by a cocktail of lower debt yields, a pause in dollar strength and bullish comments from a prominent hedge-fund investor.
August gold trading on Comex GCQ19, +0.24% declined by $3.90, or 0.3%, at $1,419.40 an ounce, after it jumped 0.9% to $1,423.30 on Wednesday, notching its highest finish for a most active contract since May 14, 2013, FactSet data show. Prices took a leg slightly higher before pulling back in Asia hours in electronic trading shortly after the Beige Book showed that trade U.S.-China tensions were continuing to buffet businesses in the Federal Reserve’s districts.
On Thursday, the U.S. dollar DXY, -0.09% was little changed at 97.209, while the 10-year Treasury note TMUBMUSD10Y, +0.42% inched higher to yield 2.0688%. Both had traded lower on Wednesday. Fading bond yields and a weaker dollar tend to encourage bids for bullion.
Meanwhile, comments from Bridgewater Associates founder, Ray Dalio, also helped to boost values for precious metals. Dalio wrote in a LinkedIn blog that an environment of central-bank policy easing and negative interest rates in much of the developed world may be a felicitous backdrop for gold gains, adding that it could both be “risk-reducing and return-enhancing to consider adding” the yellow metal as a “portfolio diversifier.”
“While many investors don’t like gold as an asset class given that it doesn’t provide any yield, at one point it may be a necessary portfolio diversifier especially when bonds of developed economies no longer provide a reasonable return,” wrote Hussein Sayed, chief market strategist at brokerage FXTM about Dalio’s comments.
Separately, September silver SIU19, +1.21% added 13.9 cents, or 0.9%, to reach $16.11 an ounce, representing the latest in a series of sharp gains for gold’s sister metal. Most-active contract prices are poised for another finish at their highest since Feb. 20.
“In the short term, the silver market has become the leadership market with yet another sharp range up extension [Thursday] and a return above the psychological $16 level,” analysts at Zaner Metals, wrote in a note. “In fact, silver has forged three very significant rallies in a row and managed that on rising open interest, and that might suggest momentum is capable of lifting prices further.”
“Initial resistance for September silver is seen at $16.17 and then at $16.27,” they said.
Among other metals, September copper HGU19, -0.39% traded at $2.714 a pound, down less than half a cent, or 0.1%. October platinum PLV19, +0.39% added $3.90, or 0.5%, to $851.10 an ounce, while September palladium PAU19, -2.27% fell $23.70, or 1.5%, to $1,519.50 an ounce.
Exchange-traded fund SPDR Gold Shares GLD, +0.05% gave up 0.7%.