Metals Stocks: Gold aims to extend post-Fed minutes pop as stocks set to stumble at open

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Gold gained early Thursday, extending the modest rise from after-hours trading Wednesday when the latest glimpse into Federal Reserve thinking backed longstanding market expectations for an interest-rate hike next month.

The minutes but didn’t necessarily indicate a more-aggressive Fed from there, however, giving gold its lift.

“The [gold] price is still holding its own close to the $1,300 mark partly thanks to the dovish minutes of the latest Fed meeting,” said Carsten Fritsch, commodities analyst at Commerzbank, in a note.

“While another rate hike at the Fed’s next meeting in mid-June seems certain, the Fed minutes sounded more cautious about what would happen next,” he said. “Furthermore, gold successfully resisted the continued appreciation of the U.S. dollar yesterday—the trade-weighted dollar index had risen to a new five-month high,” although before pulling back Thursday.

June gold

GCM8, +0.50%

rose $6.20, or 0.5%, to $1,295.80 an ounce. The pre-Fed settlement Wednesday at $1,289.60 was just above the $1,289.40 finish from May 17, which was the lowest of 2018 so far. On an intraday basis, prices tapped a year-to-date low of $1,281.20 on Monday.

See: MarketWatch’s economic calendar

Gold has twisted in choppy trading over recent days, holding ground just above its lowest finish of the year notched last week when the dollar flexed its muscle against major currencies. Prospects for higher interest rates are typically dollar-positive and a drag on gold.

The U.S. dollar pulled back from a 2018 high on renewed trade-war jitters Thursday after the Trump administration said it was investigating whether to slap import tariffs on cars. The ICE U.S. Dollar Index

DXY, -0.22%

 dropped 0.2% to 93.785, after rising to its highest level since mid-December on Wednesday. Moves in the dollar can influence gold because the precious metal is traded in the greenback.

The 10-year Treasury note yield

TMUBMUSD10Y, +0.06%

eased below the closely watched 3% line and pulled further away from the seven-year intraday high of 3.125% reached last Friday. The higher yield can dull the appeal of nonyielding bullion.

Meanwhile, geopolitical worries hovered over markets after North Korea’s senior envoy to the U.S. renewed a threat to call off a June summit with President Donald Trump. Choe Son Hui, the isolated nation’s vice minister of foreign affairs, said if the talks didn’t go ahead, the U.S. could instead face off with North Korea in a “nuclear-to-nuclear showdown.” Haven gold has only gained modest traction amid worries about North Korea, as well as trade tension and Mideast uncertainty that has helped to drive up oil prices.

In other trading, July silver

SIN8, +0.91%

rose 0.8% to $16.550 an ounce. July copper

HGN8, +0.44%

 rose 0.5% at $3.085 a pound, as July platinum

PLN8, +0.89%

 rose 0.8% at $908.20 an ounce and June palladium

PAM8, -0.44%

slipped 0.4% at $966.70 an ounce.

Among exchange-traded funds, the SPDR Gold Shares

GLD, +0.11%

 rose 0.3%, with the iShares Silver Trust

SLV, -0.51%

 up 0.5%, while the VanEck Vectors Gold Miners ETF

GDX, +0.95%

 added 0.3%.

Rachel Koning Beals is a MarketWatch news editor in Chicago.

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