Gold futures headed lower on Tuesday in early trade as investors in the commodity appeared to take a breather after a multi-day runup in prices.
December gold GCZ5, -0.74% was $8.60, or 0.8% lower, at $1,155.90 an ounce, after hitting its highest settlement since July 6 on Monday. The metal has picked up more than $50 over the past two weeks as investors have been emboldened by the view that the Federal Reserve won’t raise benchmark interest rates soon.
On Tuesday, traders attributed some of the retreat in gold prices to investors selling the metal to lock in gains from the recent rally. Gold has risen in six of the past seven trading days.
“I think what you’re seeing now is profit-taking in gold today,” Fawad Razaqzada, analyst at Forex.com, told MarketWatch. Razaqzada added that over the long term he’s bullish on gold despite today’s early slide. “The path of least resistance for gold is to the upside,” he said.
Optimism around gold has been supported by a dollar that has retreated due to expectations that rates will remain ultra-low for an extended period, given fretting about stubbornly low inflation and a dimming outlook for global growth.
Low rates can make gold, which isn’t an interest-bearing asset, more appealing. In addition, a weaker dollar can boost buying of dollar-denominated assets like gold.
In other metals, December silver SIZ5, -0.88% lost 13 cents, or 0.8%, to trade at $15.73 an ounce, while high-grade copper of the same month HGZ5, -1.01% lost 2 cents, or nearly 1%, to stand at $2.393 a pound.
January platinum PLF6, -1.32% shed $13.50, or 1.4%, to $982.40 an ounce, while December palladium PAZ5, -1.04% was off $9.30, or 1.3%, to $685.35 an ounce.
