By Claudia Assis and Virginia Harrison, MarketWatch
SAN FRANCISCO (MarketWatch) — Gold futures snapped a two-session run to turn lower Tuesday, deflated by weaker stocks and commodities, and as worried investors turned to bonds for safety.
Gold for June delivery GCM2 -0.19% retreated $8, or 0.5%, to $1,635.90 per ounce on the Comex division of the New York Mercantile Exchange.
The metal had traded higher earlier in the session, extending a rise of 0.9% in the previous day after investors reacted to a disappointing U.S. jobs report and remained cautious ahead of key corporate earnings.
Analysts at Sharps Pixley spoke of a “rebirth of uncertainty” following the jobs report in the U.S., simmering concerns about peripheral euro-zone countries, and a higher-than-expected March CPI in China.
But gold’s rally fell apart as U.S. stocks added to losses and oil traded below $102 a barrel.
“People are focusing in an economy that can’t hold a rally in stocks,” said Adam Klopfenstein, a market strategist at Archer Financial in Chicago.
U.S. equities opened mixed, but recently all three major indexes were posting losses. Stocks on Monday dropped the most in a month on the weak jobs report. Read more about U.S. equities.
A slightly stronger dollar also pressured the metal.
The ICE dollar index DXY +0.18% , which compares the U.S. unit to a basket of six currencies, traded at 79.888, compared with 79.759 recorded in late trading on Monday. Read more on currencies.
The dollar and bonds acted as safe-have conduits, leaving gold out of the equation. Treasury prices rose on Tuesday, pushing yields down for a fifth session.
Metals futures traded in the red, with copper and silver tracking gold’s twist lower.
May copper HGK2 -1.71% retreated 6 cents, or 1.8%, to $3.65 a pound. Silver for May delivery SIK2 -0.60% lost 25 cents, or 0.7%, to $31.29 an ounce.
July platinum PLN2 -1.58% declined $26.70, or 1.7%, to $1,591.60 an ounce, while palladium for June delivery PAM2 -1.96% declined $11.85, or 1.9%, to $631.90 an ounce.
Anne-Laure Tremblay, precious-metals strategist at BNP Paribas, forecast silver, platinum and palladium will trade higher in line with gold through 2012 and 2013.
“Silver is in large supply surplus, but should follow gold higher, given its strong positive correlation with the metal, although the downside risks here are particularly pronounced,” Tremblay wrote in a research report.
“Platinum also faces a large supply surplus….[and] supply issues in South Africa will provide additional support to the price in 2012,” she said.
“Palladium’s balance should tilt back into deficit in 2012, and we expect the price to increasingly reflect this,” the report added.
Meanwhile, jewelers in India went back to work after a 20-day strike. Retail stores reopened following discussions with the finance ministry, analysts at Barclays said in a note. Stores will remain open until May 11 “pending a favorable announcement regarding the removal of the excise tax,” the analysts added.
The stores are reopening ahead of the Hindu festival in April “when demand for gold is prominent, which should support prices in the near term,” they said.
