Commodity Blog

Gold futures are on track for their third consecutive session loss as riskier equities appealed to investors more than safe-haven assets. With the Federal Reserve likely to cut interest rates later this month and the US-China trade dispute potentially de-escalating, investors were more confident in financial markets.

December gold futures tumbled $4.60, or 0.3%, to $1,510.90 per ounce at 16:37 GMT on Monday on the Comex division of the New York Mercantile Exchange. Gold prices are poised for their third straight session loss, driven in part to trade concerns dissipating and much-anticipated monetary stimulus. Still, the yellow metal is up 18% so far this year.

Silver, the sister commodity to gold, is posting modest gains to kick off the trading week. October silver futures rose $0.08, or 0.45%, to 18.20 an ounce. The white metal has advanced 17% year-to-date.

For now, experts expect gold to stay on a positive course, though some analysts do think there is some room for correction. Gold could slide to $1,475 but the precious metal would continue its bullish trend, experts note.

Despite the darkened mood in global financial markets, traders are hitting the pause button on safe-haven assets and allocating resources into equities. The Dow Jones Industrial Average is drifting higher and is eyeing a new record high, thanks to US-China trade optimism and central bank stimulus.

US and Chinese trade representatives will meet early next month to restart trade talks. On Monday, Treasury Secretary Steven Mnuchin confirmed that both sides have reached a “conceptual agreement” on enforcement tools pertaining to intellectual property theft between the two powerhouse economies. Also, Beijing pledged to purchase more US agriculture in exchange for easing restrictions on telecommunications giant Huawei.

Meanwhile, after last week’s disappointing August jobs report and weak manufacturing data, it is likely that the Federal Reserve will cut interest rates by a quarter-point for the second time this year. Some investors are turning heads by new data that found the central bank purchased $14 billion worth of Treasurys last month, igniting speculation that another round of quantitative easing (QE) could be coming to stimulate the economy.

On the data front, the major focus will be on inflation later this week and retail sales.

In other metal markets, October copper futures slipped $0.0085, or 0.32%, to $2.6255 per pound. December platinum futures fell $6.40, or 0.67%, to $952.10 an ounce. October palladium futures dropped $5.30, or 0.34%, to $1,539.40 per ounce.

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