Gold settled at a nearly four-month low on Tuesday as strength in the U.S. dollar and stock market, and upbeat economic data, weighed on the metal’s haven appeal.
February gold dropped $12.80, or 1%, to settle at $1,264.90 an ounce—the lowest settlement since Aug. 8, according to FactSet data. The exchange-traded SPDR Gold Trust fell 1.1%.
“Sentiment is bearish for gold,” said Chintan Karnani, chief market analyst at Insignia Consultants.
“The rise in U.S. trade deficit numbers tells us of the strength of the U.S. economy till the first quarter of next year,” he said. “A strong U.S. economy will prevent sharp gains for gold.”
Data Tuesday showed that the by 8.6% to a nine-month high of $48.7 billion. The such as banks and retailers showed a fall to 57.4% in November, but that was from a 12-year high of 60.1% in October.
Karnani said a “continued rise in bitcoins is also preventing [a] gold-price rise.”
Investors await the nonfarm-payroll report due Friday for clues on the U.S. Federal Reserve’s path on interest-rate hikes. Higher rates are typically a negative factor for nonyielding bullion, while also boosting the dollar, making U.S.-priced gold less attractive to investors using another currency.
Against this backdrop, the ICE U.S. Dollar Index to 93.43 and benchmark , though the Dow Jones Industrial Average eased back from a record level.
Elsewhere on Comex, March silver fell 1.9% to $16.068 an ounce. The exchange-traded iShares Silver Trust fell 1.9%.
March copper dropped 4.7% to $2.946 a pound, ending at its lowest in more than two months.
Higher inventory data contributed to the retreat. Inflows of stocks at LME-registered warehouses rose 10,650 metric tons to 192,550 metric tons, industry data showed.
BMI Research said in a note that it expects industrial metals prices in 2018 to consolidate because of a slowdown in China’s metals consumption growth.
“In particular, we see metals such as steel, aluminium and copper at risk of a supply crunch as the government looks to curb production growth and potentially ban imports of scrap for environmental reasons,” BMI said.
January platinum lost 0.9% to $917.50 an ounce. March palladium declined by 1.5% to $977.15 an ounce after logging its first settlement below $1,000 since Nov. 24 on Monday.