Metals Stocks: Gold at 4 1/2-month lows as bitcoin, stocks head higher

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Gold futures resumed their sharp drop Thursday after the previous session’s brief respite, plumbing four-and-a-half-month lows as bitcoin surged and U.S. stocks traded broadly higher.

February gold GCG8, -0.84% fell $10.10, or 0.8%, to $1,256 an ounce. A close at these levels would mark the lowest since late July as gold was down about 2% for the week. The SPDR Gold Trust ETF GLD, -0.89%  fell by 0.9%. The VanEck Vectors Gold Miners ETF GDX, -0.23%  was down less than 0.1%.

U.S. benchmark stock indexes headed higher Thursday, with investors remaining focused on Washington developments and select earnings. The ICE U.S. Dollar index DXY, +0.09%  was nearly flat. The yellow metal often moves inversely to the dollar and riskier assets, including stocks.

“Gold has been driven lower, likely on thoughts of higher U.S. rates, as well as the explosion in bitcoin prices,” said Jason Rotman, principal at Lido Isle Advisors. The cryptocurrency charged through another $1,000 milestone on Thursday, clearing $15,000, according to CoinDesk.

Investors await Friday’s nonfarm payrolls report for further clues on employment ahead of the Federal Reserve’s two-day meeting wrapping Wednesday next week. Markets widely expect a rate hike at that meeting and are hungry for clues about the likelihood of follow-up hikes next year. Higher rates cut demand for nonyielding bullion.

“Friday’s U.S. jobs report is the key risk event” which could derail the rally in the dollar “in the event the data comes out significantly weaker than expected, said Fawad Razaqzada, technical analyst at Forex.com.

Haven demand, meanwhile, could underpin gold. Gold’s rise Wednesday was tied to concerns in the U.S. about the potential for a partial government shutdown, and the Trump administration’s decision to recognize Jerusalem as Israel’s capital that threatens to spark unrest across the Mideast. In addition, investors continued to keep an eye out for developments in the Brexit talks after U.K. and European Union officials on Monday failed to reach a deal that would move negotiations on to the second stage.

Read: Gold bugs hope to tap bitcoin’s mother lode of profits

Meanwhile, March silver SIH8, -0.94% fell 14.5 cents, or 0.9% to $15.81 an ounce. The iShares Silver Trust SLV, -1.33%  shed 1.3%.

March copper HGH8, +0.34%  rose less than a penny, or 0.3%, to $2.97 a pound.

January platinum PLF8, -0.53%  fell 0.5% to $898.60 an ounce, while March palladium PAH8, +2.17%  added 2.3% to $1,009.90 an ounce.

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