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Gold futures headed lower Thursday as appetite for assets considered risky overtook those viewed as havens, amid signs of easing Mideast tensions and progress toward a China-U. S. first-round trade pact.
“Investors are seeing relatively less risk from the US–Iran situation, at least for now,” wrote Carlo Alberto De Casa, chief analyst at ActivTrades.
“This had a strong impact on gold, which collapsed to $1,550. Indeed, this sharp decline reflects a reconsideration of the risk coming from the geopolitical situation,” he wrote, in a daily research note.
February gold GCG20, -0.51% on Comex retreated $8.40, or 0.5%, to $1,551.80 an ounce, after a 0.9% decline in the previous session, which marked a stunning reversal from a Wednesday peak at $1,613.30, according to FactSet data. A decline on Thursday would mark the metal’s second in a grow after logging 10 consecutive positive sessions.
Underpinning the pullback from gold from its highest levels in about seven years, China confirmed that its top negotiator, Vice Premier Liu He, will head to Washington to sign a phase-one trade pact with, paving the way to more substantial detente between Washington and Beijing on international trade.
Liu and a China envoy will head to Washington on Monday through Wednesday, according to China Foreign Ministry spokesman Gao Feng on Thursday.
The focus on progress toward a preliminary China trade pact comes only after President Donald Trump delivered remarks that underscored a move toward peace, and emphasized that no U.S. or Iraqi casualties resulted from the late-Tuesday attacks at U.S. military bases in Iraqi launched by Iran in apparent retaliation for the killing of a top Iranian general, Qassem Soleimani last week.
The combination of developments has provided a lift to risk assets like stocks, but has produced a major drag on precious metals, which had been supported by growing signs of armed conflict and political tensions.
“Unfortunately for the yellow metal, it’s time to shine has quickly passed and with it has the chance to break the $1,600 barrier in any meaningful way, in the near-term at least,” said Craig Erlam, senior market analyst at Oanda Europe, in a Thursday report.
March silver SIH20, -1.03%, meanwhile, lost 13 cents, or 0.8%, at $18.025 an ounce, after dropping 1.2% on Wednesday, while March copper HGH20, -0.16% gave up a penny, or 0.2%, at $2.805 a pound. April platinum PLJ20, +0.28% rose $2.80, or 0.3%, at $966.60 an ounce, after falling 0.8% in the previous session.
March palladium PAH20, +0.08% shed $12.80, or 0.6%, at $2,048.60 an ounce, after a 2.3% rise on Wednesday.
