Metals Stocks
Gold posts its first loss in 11 sessions as Trump's speech ebbs Iran war worries
By Myra P. Saefong and Mark DeCambre
Published: Jan 8, 2020 2:00 p.m. ET
Yellow metal falls from highest levels since 2013
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MyraP. Saefong
Markets/commodities reporter
MarkDeCambre
Gold futures settled lower on Wednesday after a speech from President Donald Trump indicated that Iran may be "standing down," temporarily easing fears of escalating tensions between Washington and Tehran, prompting prices for the metal to settle lower for the first time in 11 sessions.
Fears about how the U.S. might respond to an Iranian retaliatory strike late Tuesday against U.S. miliary bases in Iraq temporarily sent gold to $1,613.30 an ounce in intraday trading, according to FactSet data.
But bullion gave up some ground as market participants parsed Trump's brief remarks, which underscored that no U.S. or Iraqi casualties resulted from the attacks and that U.S. military bases suffered only minimal damage.
"Iran appears to be standing down, which is a good thing for all parties concerned and a very good thing for the world," Trump said, while also urging NATO to get more involved in the Middle East process.
February gold GCG20, -0.23% on Comex fell $14.10, or 0.9%, to settle at $1,560.20 an ounce, after hitting an intraday high at $1,613.30, according to FactSet data. On Tuesday, the most-active contract had settled at its highest since April 2013, and logged a tenth consecutive session rise, the longest streak since an 11-day rise ended in January 2018, according to Dow Jones Market Data.
Late Tuesday, Iran fired more than a dozen missiles at bases in Iraq where U.S. troops are stationed. Iran's Islamic Revolutionary Guard Corps said the attacks were in response to the killing last week of Maj. Gen. Qassem Soleimani.
The missile strikes rattled markets overnight, but surging prices for safe-haven assets, like gold, moderated somewhat after Iran's foreign minister said the country had taken "proportionate measures in self-defense" and didn't seek escalation or war.
With no further escalation in the situation between Iran and the U.S. on Wednesday, "the period of calm resulted in profit taking" in the gold prices, said Chintan Karnani, chief market analyst at Insignia Consultants. Traders will use sharp dips in prices to invest in gold, but it is "difficult to predict the short-term pace" of the rise in gold, he said.
Meanwhile, investors flocked to riskier assets on the heels of Trump's speech, with the S&P 500 index SPX, +0.39% and Nasdaq Composite Index COMP, +0.34% scoring fresh records.
On a technical trading level, if the $1,570 - $1,555 zones offer support for gold, prices could head back towards $1,600, said Lukman Otunuga, senior research analyst at FXTM, adding that a breakdown below $1,555 may signal a fall towards $1,535.
"From a trading perspective, gold is very overbought after the close to 10% move higher in the last 30 days," said Mark O'Byrne, research director at GoldCore in Dublin. "However, the scale of the geopolitical uncertainty could see gold stay overbought in the short term."
"Gold's record nominal highs at $1,900 [an ounce] may be surpassed later this year given the very strong demand for gold bullion due to a host of financial, geopolitical and monetary risks," O'Byrne told MarketWatch. "Prudent gold bullion investors will as ever take a long-term view and those seeking to diversify and hedge risks with an allocation to gold, should dollar cost average into their gold holding."
Meanwhile, an upbeat report from Automatic Data Processing Inc. indicated that the U.S. added a better-than-expected 202,000 jobs in December, compared with an estimate of 157,000 by Econoday. That may have helped to ease some haven demand for gold. The report comes ahead of a more closely watched jobs report on Friday, which will be gauged to glean the health of the U.S. economy.
March silver SIH20, -0.40% lost 22.6 cents, or 1.2%, at $18.167 an ounce, while March HGH20, -1.44% settled at $2.812 a pound, up 0.7%. April platinum PLJ20, -0.85% fell by 0.8% to $963.80 an ounce.
March palladium PAH20, +1.85% climbed by 2.3% to $2,061.40 an ounce, extending a climb that has lifted prices for the metal to a fresh record.
"At the risk of sounding redundant, palladium has forged yet another new all-time high it has usurped and seemingly left behind the psychological $2,000 level, and continues its rally [Wednesday] directly in the face of less supportive equity market action and recent disappointing car sales figures," analysts at Zaner Metals wrote in a daily note.
—Joy Wiltermuth contributed to this article
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Metal Exchange
GCG20
SIH20
HGH20
PLJ20
PAH20
Gold Feb 2020 U.S.: Nymex: GCG20
Open $1,561
High $1,569
Low $1,552
NASDAQ Composite Index U.S.: Nasdaq: COMP
Silver Mar 2020 U.S.: Nymex: SIH20
Copper Mar 2020 U.S.: Nymex: HGH20
Platinum Apr 2020 U.S.: Nymex: PLJ20
Palladium Mar 2020 U.S.: Nymex: PAH20