Gold futures finished lower on Tuesday to mark their first two-session skid in nearly three weeks. Still, the price move was modest, showing little reaction to the U.S. Federal Reserve Chairman Jerome Powell’s first day of testimony to Congress, at which he backed a wait-and-see mode.
Some weakness in stocks, falling yields and a softer dollar — all factors that would ordinarily support bullion — failed to inspire buying.
April gold GCJ9, +0.08% lost $1, or less than 0.1%, to settle at $1,328.50 an ounce, after shedding 0.3%, to settle at $1,329.50 an ounce, on Monday. The yellow metal hasn’t fallen in consecutive sessions since a multiday skid ended Feb. 7, according to FactSet data.
March silver SIH9, +0.25% added a fraction of a cent to $15.832 an ounce, after the metal lost 0.5% in the session before. Also among the most-active contracts, May silver SIK9, +0.20% settled at $15.926, down less than 0.05%
Powell on Tuesday “delivered a clear message that Fed policy will remain data-dependent as the outlook changes,” said Edward Moya, senior market analyst at Oanda. “He was successful in clearly explaining [that] he is not pre-judging what will be the next move in policy.”
“The current implied probabilities still show no change in policy throughout 2019,” he said.
Against that backdrop, U.S. stocks traded lower as gold futures settled, the U.S. 10-year Treasury note yield TMUBMUSD10Y, -0.91% edged lower, and the U.S. dollar, as measured by the ICE U.S. Dollar Index, was down 0.3% at 96.161.
Typically, softness in the buck, lower rates and slack in stocks tends to draw bidding in gold, which is traditionally viewed as a safe asset in times of uncertainty.
Powell also “highlighted concerns affecting U.S. and global growth,” including uncertainties surrounding Brexit, ongoing trade frictions between the U.S. and China and debt ceiling worries in the U.S., Will Rhind, chief executive officer of GraniteShares, told MarketWatch.
Those remarks were ”perhaps increasing investor interest in gold as a haven investment,” he added.
On Monday, optimism about progress toward a tariff pact between the U.S. and China helped to spark some buying in assets perceived as risky and away from so-called havens like precious metals, and that downbeat momentum for gold has continued to weigh on the bullion.
Despite the metal edging lower, some commodity traders remained upbeat on its outlook.
“Although the precious metal is at risk of depreciating further in the short term amid the risk-on sentiment, the medium to longer term outlook swings in favor of gold bulls,” wrote Lukman Otunuga, research analyst at FXTM, in a Tuesday research report.
“For as long as geopolitical risks, concerns over plateauing global growth and speculation over the Fed taking a pause on rate hikes remain key themes, gold is insulated from extreme downside shocks,” he wrote.
Meanwhile, palladium, and sister metal, platinum, futures, finished higher again on Tuesday, with palladium reaching record highs. March palladium PAH9, +2.03% added 1.8% to $1,523.50 an ounce and June palladium PAM9, +1.82% ended at $1,519.70, up 1.7%. April platinum PLJ9, +1.07% rose 0.8% to $860.40 an ounce.
“A threatened strike by South African mineworkers added to [palladium] supply concerns in an already tight market,” said Dean Popplewell, vice president of market analysis at Oanda.
March copper HGH9, +0.03% ended flat at $2.945 a pound, while the new most-active contract, May copper HGK9, +0.08% added 0.05% to $2.951.