Gold churns lower as battered stocks try to recover

Gold futures retreated Tuesday, unable to extend a sharp rally from a day earlier, when a tumble for stocks and fresh worries over global trade spats lured investors to the perceived safety of bullion.

Although European stocks were lower, U.S. futures showed that equities there would try to recover at least part of Mondays tech-driven bloodletting, while a leading dollar indexs
DXY, -0.04%
less than 0.1% drop did not register much help for gold. The two typically move inversely.

June gold
GCM8, -0.33%
fell $4.30, or 0.3%, to $1,346.90 an ounce. Gold rose over 1% to start the week, a move that allowed the haven precious metal to build on what was a third quarterly gain in a row to start the year, although was notably the slimmest three-month riseup just 0.7% for the June contract and up 1.4% on a continuing basisin seven years.

Goods and services trade uncertainties are keeping a floor under the precious metals market. The Trump administration is expected this week to unveil a list of advanced-technology Chinese imports targeted for U.S. tariffs. That will follow Beijings announced tariffs on about 130 U.S. goods, including key agricultural exports, intensifying a dispute between the worlds two largest economies.

Its this underlying safety theme, including against a backdrop of greater stock-market volatility, that is likely to keep gold above $1,300 this year, Citi analysts said in a note. They see a 30% chance that gold can even clear $1,400 in 2018.

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A combination of a dovish U.S. rate hike on March 21 [when the Federal Reserve stuck with its projected number of rate hikes for the year], global trade tensions, lower bond yields and a stronger yen all help trigger a gold rush during the reporting week to March 27, said Ole Hansen, head of commodity strategy at Saxo Bank, in a commentary, citing commitment of traders data. Speculators boughtthe most in a single week since June 2016.

Despite these upbeat factors stacked in its favor, gold has struggled to break from a slim trading range of $1,310-$1,360 since the start of the year.

Meanwhile, May silver
SIK8, -0.79%
fell 13 cents, or 0.8%, to $16.535 an ounce after a 2% climb in the previous session. The contract lost about 5% for the first quarter.

Mixed trading characterized the ETF space in early action. The SPDR Gold Shares
GLD, +1.17%
rose 0.3%. The iShares Silver Trust
SLV, +1.56%
slipped 0.3%, while the VanEck Vectors Gold Miners ETF
GDX, +1.14%
bounced back with a 1.6% gain after the ETF was down nearly 6% for the first quarter.

Among other metals, May copper
HGK8, +0.57%
added 0.2% to $3.057 a pound. July platinum
PLN8, -0.64%
fell 0.3% to $934 an ounce. June palladium
PAM8, +1.24%
fell 0.8% to $935.50 an ounce.

Related Topics Metals and Minerals Metal Exchange U.S. Stocks Markets Gold Silver Copper

Quote References DXY -0.03 -0.04% GCM8 -4.50 -0.33% SIK8 -0.13 -0.79% GLD +1.47 +1.17% SLV +0.24 +1.56% GDX +0.25 +1.14% HGK8 +0.02 +0.57% PLN8 -6.00 -0.64% PAM8 +11.50 +1.24% Show all references
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Rachel Koning Beals is a MarketWatch news editor in Chicago.

Rachel Koning Beals

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