Gold futures slipped Wednesday and was set to sink to its lowest level in a week as global markets remain unsettled by China’s attempts to stabilize its shaky economy.
Gold for December delivery GCZ5, -1.17% fell $9.50, or 0.8%, to $1,128.80 an ounce in electronic trading. Its decline puts the precious metal in position to hit its lowest closing level since Aug. 19, when the metal settled at $1,127.90 an ounce.
The yellow metal is off 2.7% for the week even as stocks have been routed. The S&P 500 SPX, -1.35% has skidded 5.2% in a brutal week so far for stocks, and such steep declines often push investors into havens like gold.
But this time, gold hasn’t been shining brightly amid the global turmoil sparked by China’s economic woes. On Wednesday, Beijing announced new stimulus measures, saying it would inject more liquidity into its sluggish economy—$21.8 billion—a day after announcing that it would cuts its benchmark interest rate.
U.S. stock-index futures ESU5, +2.55% and the U.S. dollar DXY, +0.99% have reacted positively to the China news, which could weigh on gold, analysts note.
Still, the metal’s moves have befuddled investors.
“On the one hand, gold’s counter-intuitive price action this week strongly suggests that the metal is heading to significantly lower levels,” said Fawad Razaqzada, analyst at Forex.com.
“On the other hand, however, the metal has obviously not been helped by a corresponding bounce in the dollar over the past couple of days,” he said.
Razaqzada said gold could get a boost if the Federal Reserve decides not to lift interest rates at its two-day meeting that starts Sept. 16. Expectations for a hike have shifted significantly since global equity markets have been rocked by uncertainty in Asia, with the probability of a hike in September at 21% from 50% earlier in August.
Among other metals, September silver SIU5, -3.18% was down 32 cents, or 2.2%, to $14.31 an ounce, extending its losses this week to 6.5%.
