Gold futures declined on Monday, capping a troubling month for the haven asset that saw prices mark their lowest settlement since early July, following a loss of nearly 6% for the month of November.
fell $7. 20, or 0. 4%, to settle at $1,780. 90, after futures lost over 4% last week, marking the steepest weekly slide since Sept. 25, based on the most-active contract. Monday’s settlement was the lowest since July 1.
Gold futures lost 5. 6% for the month, according to Dow Jones Market Data. Prices trade more than 1% below their long-term, 200-day moving average that stands at $1,806. 15, according to FactSet data.
The skid for gold has mostly comes on the back of reinvigorated enthusiasm for assets perceived as risky, like stocks, as apparent progress on vaccines has emboldened bullish equity investors, driving buying away from safe-haven bullion.
On Monday, Moderna Inc.
provided the latest update on potentially effective remedies for the deadly pandemic derived from the novel strain of coronavirus, saying its experimental drug showed 94. 1% efficacy in final trials and that it plans to request an emergency-use authorization from the U. S. Food and Drug Administration, as early as Monday. The authorization could make the COVID-19 vaccine candidate available to front-line workers in the coming weeks.
“Clearly the gold and silver trade continue to ‘look through’ the unrelenting flare of infections in the U. S. , as prices continue to fall sharply off lofty vaccine expectations,” analysts at Zaner Metals wrote in a daily note. “Furthermore, gold and silver prices have continued to fall sharply despite the assistance of a fresh downside breakout in the dollar. ”
The positive vaccine news has weighed on dollar-pegged precious metals, even as the buck continued a trend of weakness that would ordinarily bolster the case for foreign buyers using weaker currencies to purchase the precious commodity.
The ICE U. S. Dollar Index
a measure of the greenback against a half-dozen currencies, touched 91. 506 on Monday, its lowest level since around April of 2018, though it was last up for the session at 91. 884. The dollar index traded down 2. 3% for the month.
Gold has fallen even as the equity markets have started the week with losses, wrote Fawad Razaqzada, market analyst at ThinkMarkets, in a Monday research note.
The analyst, however, believes that gold’s decline may be capped at around this point as the dollar weakens.
“If the weakness for the dollar persists, this should prevent gold prices [from falling] further,” he said, also noting that government bond yields also have seen tepid moves. Lower yields can also buoy gold buying because the commodity doesn’t offer a coupon.
The 10-year Treasury rate
was yielding 0. 84% on Monday. Bond prices and yields move in opposite directions.
“What’s more, government bond yields have stopped going higher as investors realize the road to economic recovery is going to be a long bumpy one, despite optimism surrounding vaccines and hopefully the potential return to normal life,” Razaqzada said.
the most-active contract, lost 5 cents, or 0. 2%, to settle at $22. 593 an ounce, after registering its sharpest weekly fall since late September on Friday. Silver, based on the finish for the most-active contract on Oct. 30, lost 5. 1% for the month.
Copper, meanwhile, ended higher, with the March contract
up 0. 6% at $3. 438 a pound, with prices up 12. 6% for the month.
“The copper market continues to be the ‘odd man out’ in metals and most commodity markets, with prices surging higher despite weakness in equities, signs of renewed U. S. /Chinese tensions and escalating Chinese/Australian tensions,” said analysts at Zaner Metals.
“However, the copper market continues to anticipate strong demand from China and the maintenance of generally tight global supply,” they said.
Rounding out action among the Comex metals, January platinum
finished at $965. 90 an ounce, up 0. 1% for the session, to post a nearly 13. 9% rise from the Oct. 30 settlement. March palladium
lost 1. 4% to $2,405. 90 an ounce, with the contract roughly 8% higher for the month.
Trading in the Nasdaq was exhibiting panic-like-buying behavior Monday late morning, even as the broader market softened in the last trading session of November. The Nasdaq Composite undefined was sinking 0. 8% at 12,111, while the Nasdaq Arms Index, a volume-weighted breadth measure, fell to 0. 322. Many on Wall Street see declines below 0. 500 as suggesting panic buying. The Arms Index is calculated by dividing the ratio of the number of advancing stocks over decliners by the ratio of the volume of advancing stocks over declining volume. As the stock market rises, the Arms often falls below 1. 000, as the buyers rush into advancing stocks. The current dynamic suggests that investors may continue to adhere to a trend of buying large-capitalization technology-related names as a haven proxy in times of uncertainty. The number of stocks declining on the Nasdaq on Monday outnumbered advancers by nearly 2. 4 to 1, but volume in advancing stocks represented 56% of total volume on the Nasdaq. Meanwhile, the Dow Jones Industrial Average undefined was down over 400 points, or 1. 4%, at 29,502, while the S&P 500 index undefined was trading 0. 9% lower at around 3,605. Despite, the declines, the Dow may still register is bet monthly gain since 1987, while both the Dow and S&P 500 were aiming for their best Novembers since 1928.
Myra P. Saefong, assistant global markets editor, has covered the commodities sector for MarketWatch for 20 years. She has spent the bulk of her years at the company writing the daily Futures Movers and Metals Stocks columns and has been writing the weekly Commodities Corner column since 2005.
Mark DeCambre is MarketWatch’s markets editor. He is based in New York. Follow him on Twitter @mdecambre.
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Gold, Gold as an investment, United States Dollar
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