Gold futures settled higher Wednesday, rebounding the lowest close in three weeks as tensions in Ukraine, weakness in U.S. equities and some downbeat economic data fueled some safe-haven demand for the metal.
Gold for June delivery GCM4 -0.16% climbed by $3.50, or 0.3%, to settle at $1,284.60 an ounce on the Comex division of the New York Mercantile Exchange. Prices had fallen for a third straight session on Tuesday to close at $1,281.10, their lowest level since April 1 on a most-active contract basis, as a six-day rally in the S&P 500 index SPX +0.48% lured investors away from the precious metal. May silver SIK4 -0.45% rose nearly 8 cents, or 0.4%, to $19.44 an ounce.
Gold prices added to gains early Wednesday after a report showed the sales pace of existing U.S. homes ticked down in March to the slowest rate since July 2012. Separate data showed that the initial U.S. Markit PMI fell slightly to 55.4 in April from 55.5 in March.
Overall, however, “trading is really dull in gold and silver right now,” said Adrian Ash, head of research at BullionVault. “Even the sellers have gone away.”
Thursday’s May gold options expiry has failed to spook the market either way, because this $1,280 level is “no man’s land” on a technical basis, he said.
Traders continued to keep an eye on developments in Ukraine. Hundreds of U.S. troops are headed for maneuvers in Eastern Europe through year-end, the Pentagon announced, with the new deployments intended to reassure allies on Russia’s borders. Meanwhile, Ukraine accused pro-Russian separatists of torturing and killing two people and shooting at one of its military planes.
U.S. stocks traded mostly lower on Wall Street as of Wednesday afternoon. Meanwhile, the U.S. dollar slipped, with the ICE dollar index DXY -0.02% , a measure of the U.S. unit against a basket of six major rivals, off 0.1% to 79.850.
Analysts said the dollar will continue to influence gold. A stronger dollar can undercut commodities priced in the currency by making them more expensive to nondollar users. A weaker dollar can boost those commodities.
Bearish traders argued that despite occasional flare-ups, the overall tone in financial markets shows worries over geopolitical and macroeconomic risks remain subdued. “Importantly, gold is once again starting to move against the dollar with the geopolitical risk reduced and investors seeing little value in holding this zero-interest rate bearing asset at a time of little physical demand,” said Andrey Kryuchenkov, strategist at VTB Capital in London. “In line with our expectations, the market has reached early April lows already, testing levels below $1,280. But the market could still consolidate a little in dull trading this week unless selling intensifies on a sustained close below $1,278 to $1,280 and the dollar presses ahead,” he said in a note.
Other metals on Comex finished higher as well, with high-grade copper for May delivery HGK4 +0.10% adding just over a half cent to $3.06 a pound. July platinum PLN4 -0.25% closed at $1,403.90 an ounce, up $3.60, or 0.3% and June palladium PAM4 -0.56% tacked on $2.35, or 0.3%, to $786 an ounce.
Shares of gold and silver miners climbed Wednesday afternoon, with the Philadelphia Gold and Silver Index XAU +1.65% up 1.9%. Freeport-McMoRan Copper & Gold Inc. FCX -0.35% shares added 0.4%, while Newmont Mining Corp. NEM -0.08% shares were up 3.4%, with each of the companies due to report quarterly results Thursday.
Among exchange-traded funds, the SPDR Gold Trust GLD -0.02% inched down by 0.1%, while the iShares Silver Trust SLV +0.11% fell 0.2%.