Gold futures fell Wednesday and dropped back from their six-year high after global equity markets rebounded, indicating that tensions in Hong Kong – a source of global fears – are currently abating. Silver prices, however, were the highest gain in value for the white metal in about three years.
GCZ19, + 0.05%
gave up $ 1.10, or nearly 0.1%, trading at $ 1,554.80 an ounce after rising 1.7% on Comex on Tuesday , the highest since April 201
Silver for delivery in December
SIZ19, + 1.42% ,
Meanwhile, 18.3 cents or 1% rose. at $ 19.42 an ounce, which represents a 4.9% increase versus Tuesday, marking its highest level since September 26, 2016, as metal leveled to $ 19.60 an ounce.
"Silver is still catching up on gold and trading very high volumes," said Rhona O'Connell, Market Analysis Manager for EMEA and Asia at INTL FCStone.
Read: Silver rally steals the show even as gold rises to a 6-year high
"It looks like it's massively overbought and does not have the energy to move forward. However, it may well have that energy, "she said, noting that" it's entirely possible to argue that silver can offset $ 20 an ounce. "
At present, optimistic developments in Asia have helped bolster the purchase of risky assets for those perceived as havens, such as gold.
Stock markets in Hong Kong
HSI, + 3.90%
rose the most on a single day since November, after Carrie Lam, the city's head of government, had announced the extradition law that had triggered months of demonstrations that triggered the economy affected the territory, and formally withdrew, threatening to disrupt global financial markets.
"Gold has been steadily rising from $ 1,400 since the beginning of August. This reflects continuing concerns about political risks and fears that both the US and Chinese economies will slow down by 2020, "said Fiona Cincotta, senior market analyst at City Index.
On Tuesday, the Institute for Supply Management's manufacturing index rose from 51.2% in July to 49.1% in August, marking the index's first decline in 35 months, with a value below 50% indicating worsening conditions
A sharp fall in the value of the US dollar on Wednesday has probably helped limit losses on gold, a measure of which is the ICE US dollar index
DXY, -0.54% ,
An indicator of the US unit versus a basket of half a dozen currencies eased by 0.5% to 98,517. A weaker dollar tends to make gold and other metals more attractive at dollar prices for buyers with other currencies.
Given the weakness of the dollar, some strategists predicted that gold's retreat is likely to be temporary, and predicted that the metal would soon go for a perch at or above $ 1,600 an ounce.
"The fact is that [Federal Reserve’s rate-setting Federal Open Market Committee] is split over its next monetary policy move, while investors have already priced in another rate cut," said Naeem Aslam, chief market analyst at TF Global Markets Ltd, in a daily research note. "US economic data will continue to suffer from the trade war, and as long as this remains the main denominator, we believe gold may easily exceed 1600 over the next few weeks," he said.
Other Comex traded metals outperformed December copper
HGZ19, + 2.53%
plus 6.4 cents, or 2.5% at $ 2.5915 per pound. October platinum
PLV19, + 3.37%
added $ 27.80 or 2.9% to $ 983.20 per ounce and December palladium
PAZ19, + 1.24%
increased $ 13.50 or 0.9% to $ 1,548.70 an ounce.