Metals Stocks: Gold prices end lower after a 4-session rise to their highest since June

by | Jan 5, 2023 | Stock Market

Gold futures finished lower on Thursday, posting their first loss in five sessions, as traders booked profits in the wake of the metal’s rise to its highest price since June. Price action
Gold for February delivery
GC00,
-1.02%
 
GCG23,
-1.02%
fell $18.40, or 1%, to settle at $1,840.60 per ounce on Comex. Prices for the most-active contract settled Wednesday at $1,859, the highest finish since June 10, FactSet data show.

Silver for March delivery
SI00,
-2.46%
 
SIH23,
-2.46%
shed 54 cents, or nearly 2.3%, to $23.424 per ounce.

Palladium for March delivery
PLJ23,
-1.93%
lost $64, or 3.6%, to $1,732.70 per ounce, while platinum for April delivery
PAH23,
-3.27%
fell $22.70, or 2.1%, to $1,069.60 per ounce.

Copper for March delivery
HGH23,
+2.38%
rose 8 cents, or nearly 2.2%, to $3.821 per pound.

Market drivers Precious-metals traders took profits in gold and silver after both traded at multi-month highs at the start of 2023. A stronger U.S. dollar also helped to weigh on prices, analysts said.

“Gold prices have retraced from their recent highs for two reasons. Firstly, it is the strength of the dollar index which is pushing the price of the shining metal lower. Secondly, after the massive run in prices, it is absolutely normal for traders to book some profit off the table,” said Naeem Aslam, chief market analyst at AvaTrade. Read: Why gold prices may be headed for record highs this year The ICE U.S. Dollar Index
DXY,
+0.73%,
a gauge of the buck’s strength against a basket of rivals, was up 0.7% to 104.981. The fall in gold price is “just a correction or profit taking before December nonfarm payrolls [Friday] and CPI next week,” Chintan Karnani, director of research at Insignia Consultants told MarketWatch. For gold to continue its rise, apart from technical factors it needs U.S. December nonfarm payrolls to come in “negative to less than 100,000 with a sharp rise in unemployment rate,” and the December inflation numbers, CPI and PPI, should fall sharply, he said. “If both these conditions are met, then the gold price will break past $2,000 before the first Federal Open Market Committee Meeting of the year, he said. The FOMC’s next policy meeting is Jan. 31 to Feb. 1. Also see: Here’s what TIPS bonds indicate about the outlook for gold On Thursday, gold prices lost more ground as U.S. Treasury yields mostly climbed after the U.S. ADP private-payrolls data showed 235,000 jobs were created in December. That was more than economists had expected, adding to concerns the economy is not slowing enough to prevent further Federal Reserve interest rate rises.

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