Metals Stocks: Golds 4-day Win Streak At Risk Though China, Russia Issues Underpin Haven Demand

Gold futures fell Tuesday, at risk of snapping a string of four straight winning sessions as traders hit pause on the metal’s run even as a leading dollar index mostly sagged.

Prices for the metal found support over recent sessions as the dollar declined and as financial markets kept close tabs on the ebb and flow of trade tensions between the U.S. and China, concerns that have sent gold’s price up some 3% in reaction. The ongoing global reaction toward Russian intelligence officers in the wake of the U.K. poisoning case is underpinning demand for the haven metal, analysts said.

Early Tuesday, April gold GCJ8, -0.98%  dropped $13.80, or 1%, to $1,341.20 an ounce. The contracted settled Monday at $1,355 an ounce, the highest finish since Feb. 16. The contract’s four gains in a row was the longest such streak since January, according to FactSet data.

Silver was slipping between a narrow gain and a narrow loss, with the May contract SIK8, -0.74% still changing hands around $16.684 an ounce, about where it finished Monday trading.

The U.S. Dollar Index DXY, +0.12% fell 0.1%. Gold and the dollar typically move inversely, as moves in the U.S. unit can influence the attractiveness of commodities to holders of other currencies, but the pair can defy that relationship from time to time. Expected stock gains also reflected a return to risk-on sentiment, which has detracted from gold.

Despite Tuesday’s early price action, most analysts expect the floor in gold to hold given its haven status.

“Gold is in demand at present not only as a safe haven, but no doubt also as a crisis currency,” said Carsten Fritsch, commodities analyst at Commerzbank, in a note. “This is because the political conflict between the West and Russia is escalating in response to the poison attack on a former Russian spy and his daughter in England in early March.”

With the latest developments, some 15 European Union states have expelled a total of 30 Russian diplomats. The U.S., with the expulsion of 60 individuals, the largest ever such action against Russia, has joined in, as have Canada and Australia.

Precious metals have also climbed amid weakness for the dollar in the wake of the Federal Reserve’s hints at a less-aggressive monetary policy this year than some market participants had been factoring in.

In a recent note, Goldman Sachs said its commodities team has become bullish on gold for the first time in more than five years, “based on higher inflation, rising [emerging market] wealth and concerns about an equity correction.”

Among other metals, trading was mixed. May copper HGK8, +0.74%  rose 1% to $3.00 a pound. July platinum PLJ8, -0.20%  rose 0.6% to $962.10 an ounce. June palladium PAM8, +0.53%  rose 0.5% to $971.55 an ounce.

Among exchange-traded funds, the iShares Silver Trust SLV, +0.90%  was up 0.3%, while the SPDR Gold Shares GLD, +0.53%  slipped 0.5% and the VanEck Vectors Gold Miners ETF GDX, +1.45%  eased 0.9%.

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