Metals Stocks: Gold ends higher as Trump comments put pressure on the dollar

By

Markets/commodities reporter

News editor

Gold prices ended higher Monday, as President Donald Trump’s claim on Twitter that Russia and China are playing a “currency devaluation game” contributed to pressure on the dollar, lifting demand for the precious metal, which is traded in the greenback.

Palladium futures, meanwhile, marked their highest finish since late February, buoyed by worries about the potential for further U.S. sanctions on Russia, which is among the world’s biggest producers of the metal.

Trump’s “remarks on China and Russia playing the devaluation game and it not being acceptable,” contributed to gold’s gains Monday, said Michael Kosares, founder of gold broker USAGOLD. The comments resurrect “concerns from late January when Treasury Secretary [Steven] Mnuchin seemed to reverse the traditional strong dollar policy at the Davos conference.”

“The president seems to be inferring that devaluation will beget devaluation,” said Kosares. “That’s why the dollar took a tumble and gold pushed higher.”

June gold GCM8, +0.04% tacked on $2.80, or 0.2%, to settle at $1,350.70 an ounce. It tallied a rise of roughly 0.8% last week, after ending Wednesday at the highest finish since late January. May silver SIK8, +0.04% climbed 0.1% to $16.677 an ounce.

The ICE U.S. Dollar Index DXY, -0.44% which measures the greenback against six major rivals, fell 0.4% to 89.44.

A rise in U.S. stocks Monday, which enjoyed a relief rally pinned on hopes the U.S. may not be dragged into a deeper conflict with Syrian allies Russia and Iran, had put pressure on gold in early dealings.

Gold’s moves also follow a round of mixed economic data, though those reports were seen doing little on their own to dissuade the Federal Reserve from modest, gold-negative interest-rate hikes over coming months.

Markets have also tempered their reaction to news the U.S. joined with allies France and Britain to launch missiles over the weekend that destroyed much of Syria’s chemical-weapons capabilities. The strikes left much of President Bashar al-Assad’s conventional military facilities intact, easing immediate fears of an escalation in tensions with Russia, a backer of Syria’s regime. On Sunday, Assad’s forces unleashed fresh airstrikes against rebels in a demonstration of his regime’s continued strength.

Still, Russian stocks and related exchange-traded funds were under some pressure after reports the Trump administration will target the country with more sanctions, this time based on companies linked to the Assad regime and chemical weapons.

Gold is “reacting hardly at all to the U.S.-led military strike against Syria which, according to U.K. Foreign Secretary Boris Johnson, was a one-off action, with no further attacks planned,” said Carsten Fritsch, commodities analyst at Commerzbank.

Read: Russian sanctions could fuel another aluminum rally

Haven demand for gold may be showing up in exchange-traded fund flows, however, Fritsch said. Gold ETFs registered inflows of 16.6 tons last week and of no less than 36 tons since the beginning of the month, the Commerzbank team noted. This is already nearly twice as much as in all of March. By contrast, speculative financial investors left their net long positions more or less unchanged in latest week. “Investors are slowly beginning to show increased buying interest in response to the geopolitical risks and resulting uncertainty,” Fritsch said.

The SPDR Gold Shares GLD, +0.14% and the iShares Silver Trust SLV, +0.13%  each rose 0.3%, while the VanEck Vectors Gold Miners GDX, -0.61%  fell 0.8%.

Read: Global economic growth was a blessing and curse for 2017 silver demand

In other metals trading, palladium jumped in reaction to the Syrian airstrikes, but there is also a “large worry that Norilsk Nickel—the world’s top producer of the metal—could be hugely affected by the latest round of sanctions slapped on Russia,” said Adam Koos, president of Libertas Wealth Management.

June palladium PAM8, +1.58%  rose 2.3% to finish at $1,003.75 an ounce—the highest settlement since Feb. 28.

Copper HGK8, +0.49% rose 0.8% to $3.096 a pound, but July platinum PLN8, -0.08% shed 0.1% to $931.80 an ounce.

Filed in: Top News Tags: 

You might like:

God-fearing countries are among the least wealthy—with one notable exception God-fearing countries are among the least wealthy—with one notable exception
America’s 1% hasn’t controlled this much wealth since before the Great Depression America’s 1% hasn’t controlled this much wealth since before the Great Depression
Women don’t see men who drive flashy cars as husband material Women don’t see men who drive flashy cars as husband material
The New York Post: Trump dubs himself ‘your favorite president’ in tweet about Michael Cohen tape The New York Post: Trump dubs himself ‘your favorite president’ in tweet about Michael Cohen tape
The Wall Street Journal: Cease-fire in place between Israel and Hamas in Gaza Strip The Wall Street Journal: Cease-fire in place between Israel and Hamas in Gaza Strip
The New York Post: New York Giants owner says Trump lacks understanding of NFL players’ anthem protests The New York Post: New York Giants owner says Trump lacks understanding of NFL players’ anthem protests
The New York Post: Most of music business’s top money makers in 2017 had been at it for decades The New York Post: Most of music business’s top money makers in 2017 had been at it for decades
The New York Post: ‘Stand your ground’ law to protect Florida parking-lot shooter from prosecution The New York Post: ‘Stand your ground’ law to protect Florida parking-lot shooter from prosecution

Leave a Reply

Submit Comment
© 2018 Stock Investors News. All rights reserved. XHTML / CSS Valid.