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Gold Sideways As Dollar Declines, Equities Plunge

November 19, 2018 at 17:50 by Andrew Moran

Gold futures are struggling to find direction to kick off the trading week as the greenback tumbled and the equities market plunged. The yellow metal, which notched a modest weekly gain last week, is looking for momentum ahead of the Thanksgiving holiday, mostly from bearish news. But investors are not taking the bait, raising their short positions to a more than one-month high.

December gold futures were flat at $1,223.00 per ounce at 16:15 GMT on Monday. Gold prices have had a disappointing 2018, falling 8% year-to-date. The precious metal has advanced nearly 2% over the last five trading sessions.

Silver, the sister commodity to gold, dipped to start the new holiday-shortened trading week. December silver futures slipped $0.037, or 0.26%, to $14.345 an ounce. The white metal has also performed well in the last week, surging just under 3%. Unfortunately for silver bugs, the metal commodity has cratered 17% so far in 2018.

The US dollar shed 0.17% to 96.24 after decreasing 0.4% last week. A weaker buck is good for dollar-pegged commodities because it makes it cheaper for foreign investors to purchase. As the year gradually comes to an end, the greenback has had a tremendous year, climbing about 5%.

Despite the US central bank expected to raise interest rates at next month’s Federal Open Market Committee (FOMC) policy meeting, many Federal Reserve policymakers have warned about a potential global slowdown. This has caused analysts to question if the Fed will really tighten rates in 2019 as recent minutes have suggested.

Meanwhile, gold prices could not take advantage of the crash in equities. The Dow Jones plummeted 450 points, the Nasdaq crumbled 200 points, and the S&P 500 slid 1.5%. While European markets endured the same fate, Asian shares are rallying on Monday.

On the data front, homebuilder sentiment – the National Association of Home Builders/Wells Fargo Housing Market Index – decreased eight points to 60, down from 69 a year ago.

Overall, though, many analysts concede that it will be a quiet week because of Thanksgiving. But traders might be spending their free time betting against gold because hedge funds and money managers raised their net short positions to their highest levels in five weeks, according to the US Commodity Futures Trading Commission (CFTC).

In other metals markets, December copper futures were down $0.005, or 0.17%, to $2.79 a pound. December platinum futures tacked on $6.90, or 0.82%, to $853.60 an ounce. December palladium futures tumbled $13.90, or 1.2%, to $1,140.70 per ounce.

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