Gold prices jump, reach $1300

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May 13, 2019 10:44am NYSE:GLD

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From Rachel Koning Beals: Gold futures overcame early losses, gaining as stock futures markets, already down on the day, deepened their losses closer to the opening bell, with U.S.-China trade talks at an apparent stalemate.

The precious metal had settled higher for a second straight session on Friday, helping prices to post a modest weekly rise, as the Trump administration raised the import taxes on select Chinese goods from 10% to 25%. The administration claimed its Chinese counterparts reneged on commitments made in earlier talks. Stocks on Friday had dropped initially before staging a late-session recovery and now, Wall Street was setting up for a tough start to the new week, with Dow Jones Industrial Average futures down some 500 points, or nearly 2%, at one point, amid reports of countermeasures from China.

Gold for June delivery GCM9, +0.75% was up $3.40, or 0.3%, at $1,290.70 an ounce but had traded as low as $1,282.40. It settled Friday at $1,287.40, a move that marked the fifth gain in six sessions, according to FactSet data. For last week, prices based on the most-active contract climbed 0.5%.

The SPDR Gold Shares ETF GLD, +0.79%  rose 0.7%.

The dollar, as measured by the ICE U.S. Dollar Index DXY, -0.24% was down 0.3%, though its early relative strength was helping to keep a lid on gold’s price. Instead, currency investors were increasingly favoring safe havens, including the Japanese yen, over the dollar.

“Markets will likely be left in limbo for the coming weeks. Positive risk sentiment that had built in the early months of 2019 is now questionable,” said Richard Perry, market analyst at Hantec Markets. “Safe havens have benefitted from all of this. Treasury yields have fallen, whilst the yen and Swissy have been the main winners in the forex space. The dollar had initially slipped on the shock, however, in the past couple of sessions has begun to build support again.”

It is relative dollar strength that has limited gold’s advance, say analysts, as a richer buck makes the metal less attractive to investors using other currencies and vice versa.

Gold also finds itself in a tough spot as far as the charts are concerned.

“A very slight positive bias within the consolidation of the past few weeks is now on the brink of breaching the 11-week downtrend,” said Perry. “However, it is still difficult to see this as a bull move in the making. The market has been stuck in a range between $1,266 and $1,291 for almost four weeks now.” He says even if key resistance at $1,291 on the upside is breached, the psychologically significant $1,300 line still looms large.

July silver SIN9, -0.20% trimmed earlier, deeper losses, last off 6 cents, or 0.4%, at $14.735 an ounce, with the commodity, considered a precious and industrial metal, posting a weekly loss of 1.3% through Friday. July platinum PLN9, -0.80%fell $4.60, or 0.5%, to $860.80 an ounce; it suffered a weekly loss of 1.1%. June palladium PAM9, -2.55%  was down $27, or 2%, at $1,323 an ounce. July copperHGN9, -1.96%  fell 1.6% to $2.729 a pound, after a weekly dec

The SPDR Gold Shares (GLD) was trading at $122.42 per share on Monday morning, up $0.99 (+0.82%). Year-to-date, GLD has declined -0.99%, versus a 5.83% rise in the benchmark S&P 500 index during the same period.

GLD currently has an ETF Daily News SMART Grade of B (Buy), and is ranked #1 of 35 ETFs in the Precious Metals ETFs category.

This article is brought to you courtesy of MarketWatch.

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