2 weeks ago
Commodities

Gold Up After 7-Day Losing Streak; $1,300 Unlikely for Now

By Barani Krishnan Investing.com - What's happening out there that could bring back $1,300 gold? It's a question investors long and short

By Barani Krishnan

Investing.com - What's happening out there that could bring back $1,300 gold?

It's a question investors long and short on the yellow metal are asking. The lack of a coherent answer is keeping gold futures on Comex hovering just under that key level they traded through last month.

Comex gold for April delivery settled up on Wednesday for the first time in eight sessions, rising $2.90, or 0.2%, to $1,287.60 per ounce, as the dollar backed off from its recent highs on the U.S.-China trade war play.

Spot gold, reflective of trades in physical bullion, meanwhile, was down $1.97, or 0.2%, to $1,285.92 per ounce by 2:55 PM ET (19:55 GMT).

Gold hit 10-month peaks just shy of $1,350 an ounce on Feb. 20, a month after getting to $1,300. But the surge abruptly ended last Friday. Gold dropped under $1,300 as the dollar gained steam on worries that China might see its worst growth in nearly three decades this year due to its protracted tariffs battle with the U.S.

The dollar index, which measures the greenback against a basket of six currencies, was virtually flat at 96.80 on Wednesday. The index scaled a more-than-two-week high of 96.95 on Tuesday as gold fell to a five-week low of $1,280.70.

U.S. stocks, another contrarian trade to gold, fell Wednesday amid a rout in health care stocks and profit-taking by investors who had chased the S&P 500 up 11% this year on bets for a smooth U.S.-China trade deal and on Fed assurances of no immediate rate hike.

Despite gold's rally Wednesday, there was no indication it will continue rising, analysts said.

"Wall Street gold traders still holding on to their short positions from the $1,318 level have said they will likely start to cover and take profits if the market reaches $1,295 on the spot price," said Walter Pehowich, executive vice-president at Dillon Gage Metals in Addison, Texas. "In the meantime, they are just enjoying the ride to the downside."

Pehowich said there were no immediate catalysts to give gold a solid bump higher, adding that at least one trader had told him he "would be very surprised to see the price of gold test the $1,300 level again."

Palladium also rose on Wednesday, retaining its standing as the world's costliest metal.

The spot price of palladium rose by $15.70, or 1%, to $1,534.30 per ounce. Spot palladium hit a record high of $1,569.40 a week as fears of dire shortage prompted investors to pile into the auto-catalyst metal.

Trades in other Comex metals as of 2:22 PM ET (19:22 GMT):

Palladium futures up $25.30, or 1.7%, at $1,491.20 per ounce.

Platinum futures down $10.25, or 1.2%, at $827.75 per ounce.

Silver futures down 2 cents, or 0.1%, at $15.085 per ounce.

Copper futures down 1 cent, or 0.4%, at $2.92 per pound.