Gold futures were drifting lower Tuesday, under pressure from strength in the U.S. dollar.
February gold GCG6, -1.13% was $8.80, or 0.8%, lower at $1,087.40 an ounce. The ICE U.S. Dollar Index DXY, +0.19% a measure of the greenback’s strength against a basket of six rival currencies, was up 0.3% on Tuesday and has advanced about 0.6% this week, weighing on assets priced in dollars.
A stronger buck makes dollar-denominated assets more costly for investors using other currencies.
Gold is looking at three days of losses, which would mark its longest streak of losses in January. Despite possible impediments to gains, including the prospect of more interest-rate increases by the Federal Reserve, which is a headwind for assets that don’t bear a yield, gold has gained 2.6% in January, according to FactSet data.
Jim Wyckoff, senior market analyst at Kitco, blamed the recent drop in gold on investors collecting profits after gold’s strong month.
“Gold prices are moderately lower Tuesday on some more profit-taking and chart consolidation following recent gains that saw prices hit a two-month high late last week,” Wyckoff wrote in a Tuesday note.
Colin Cieszynski, chief market analyst at CMC Markets, says he’s expecting gold to hold above $1,086 an ounce, despite its recent slide.
“Gold has slipped back under $1,100 but remains supported above its $1,086 recent breakout point, trading near $1,090 as it consolidates its recent breakout…,” Cieszynski said in a research note Tuesday.
In other metals, high-grade copper for March delivery HGH6, +0.18% was little changed at $1.972 a pound, but hovering around six-year lows for the industrial metal.
Meanwhile, March silver SIH6, -0.76% lost 9 cents, or 0.6%, to trade at $13.78 an ounce. Elsewhere on Comex, April platinum PLJ6, -0.59% was $1.30, or 0.2%, lower at $845 an ounce, while March palladium PAH6, -0.07% sank $4.75, or 1%, to trade at $469.65 an ounce.
