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Gold Continues Struggles As More Losses Expected

November 11, 2019 at 16:56 by Andrew Moran

Gold kicked off the trading week higher, only for the yellow metal to pare its gains. After recording its worst weekly performance in more than two years, gold prices remain in the red, and investors are expecting greater losses for the next several sessions. Precious metals may not find much of a direction on US data until the end of the week when several important metrics are released.

December gold futures tumbled $7.30, or 0.5%, to $1,455.60 per ounce at 15:41 GMT on Monday on the Comex division of the New York Mercantile Exchange. Last week, gold posted a 4% loss, the biggest drop since July 2017. Year-to-date, gold prices are now up 14%.

Silver, the sister commodity to gold, is also in the red to start the trading week. December silver futures fell $0.04, or 0.23%, to $16.785 an ounce. The white metal suffered a steep 7% decline last week. So far on the year, prices are up 8%.

Analysts are warning that metal commodities might be in a difficult position after the Dow Jones Industrial Average and the S&P 500 enjoyed record gains last week. With the first phase of a comprehensive US-China trade agreement on the horizon, investors may have a greater risk appetite, which is bearish for bullion. Although there were concerns that President Donald Trump may be hurting negotiations by saying that China wants more of a trade deal than he does, investors think that both sides are itching for a new deal.

Gold did find support in a lower US dollar as the greenback slipped 0.18% to 98.18. A weaker buck is good for dollar-denominated commodities because it makes it cheaper for foreign investors to buy.

On Thursday, Federal Reserve Chair Jerome Powell is scheduled to testify before Congress. He is expected to discuss the economy, monetary policy, and his outlook on growth. The US central bank recently cut interest rates for a third time this year, lowering the target rate to 1.50% and 1.75%.

On the data front, the big numbers will come out on Friday when October retail sales and industrial and manufacturing production figures are published. The market is penciling in a 0.3% monthly gain in retail sales, as well as a 0.3% and a 0.4% decline in industrial and manufacturing output, respectively.

In other metal markets, December copper futures slipped $0.0175, or 0.65%, to $2.66 per pound. December platinum futures slumped $13.40, or 1.5%, to $879.70 an ounce. December palladium futures cratered $58.90, or 3.45%, to $1,649.70 per ounce.

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