Gold futures ended with a loss on Wednesday, snapping a two session streak of gains, a day after the commodity settled at its highest level since July on the back of dollar weakness.
Gold for February delivery
fell by $4, or 0.3%, to settle at $1,242.60 an ounce, following the highest finish for the contract since July 25 on Tuesday, FactSet data show. March silver
lost 5.8 cents, or 0.4%, to $14.582 an ounce, after that metal ended 1% higher on Tuesday.
“Traders are watching two important events in the coming days,” the ongoing developments on Brexit and how this factor can trigger a bigger move in the market and Friday’s U.S. nonfarm payroll data, said Naeem Aslam, chief market analyst at ThinkMarkets UK.
“If the Brexit vote is not approved, this will be a risk-off event for the market and we could see the price of gold moving higher,” he said. “Similarly, a soft U.S. NFP reading will only add fuel for this rally.”
Read: Theresa May absorbed three sharp blows Tuesday as steward of U.K.’s Brexit process
U.S.-based equity and interest-rate futures and options products traded on the CME
were closed Wednesday in observance of the national day of mourning for former President George H.W. Bush. However, CME commodity markets operated on a regular trading schedule, while U.S.-based risk markets were largely darkened.
Some market participants were attributing gold’s retreat on the session to investors selling some of their holdings after Tuesday’s healthy gain.
“With risk sentiment stabilizing, well kind of, the gold market is taking some profits,” wrote Stephen Innes, a head of trading at Oanda, in a Wednesday research report. “Overall its time to hit the pause button until markets open until after the day of mourning,” he said.
Concerns about a lasting cessation of hostilities between President Donald Trump and Chinese President Xi Jinping after the pair approved a 90-day moratorium between Beijing and Washington on tariff tensions, and signs that bond investors hold a dim long-term outlook for markets, have combined to upend risk appetite.
Meanwhile, the ICE U.S. Dollar Index
traded little changed at 96.996, but was down about 0.3% week to date. Typically, a stronger buck dulls investment demand for dollar-priced commodities, like gold, and vice versa.
Later in the week, job-market data, a key report for the Federal Reserve ahead of its last rate-setting meeting of 2018 Dec. 18-19, will come into focus. See economic calendar
In other metals futures trading, March palladium
rose 0.4% to $1,184.40 an ounce, extending its run of record settlements. The spot price for metal tapped an intraday high of $1,258 Wednesday, according to data form Kitco, surpassing the price of gold.
Read: Palladium at record high, with prices at their closest to gold in 16 years
fell by 0.3% to $802 an ounce and March copper
added 0.5% to $2.774 a pound.
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