Metals Stocks: Gold prices retreat as the metal marks 10 years since first topping $1,000

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Gold futures headed lower on Wednesday, set to give up some of what they gained a day earlier, as the market marked a decade since prices first topped $1,000 an ounce.

Strength in the dollar pressured prices Wednesday, even as data showed that wholesale inflation prices rose by a mild 0.2% in February, and retail sales fell in February for a third month in a row.

April gold GCJ8, -0.11% lost $1.90, or 0.1%, to $1,325.20 an ounce. The contract rose $6.30, or 0.5% on Tuesday, for its biggest single-session dollar and percentage rise since March 6 and highest settlement since March 7, FactSet data showed. Gold rose then as the U.S. dollar softened and the high-profile departure of Secretary of State Rex Tillerson boosted haven demand for the yellow metal. The contract has been volatile, trading within a relatively tight range.

London’s gold benchmark price first broke $1,000 per ounce on March 14, 2008, according to Adrian Ash, head of research at BullionVault. Gold futures, based on the most-active contracts, first hit an intraday high of $1,001.50 on March 13, 2008, and marked their first-ever settlement above $1,000 on March 17, 2008, according to FactSet data.

“It would take over 18 months for gold’s $1,000 handle to stick,” he said in his latest note. But “the world’s London benchmark hasn’t given a 3-figure price” since the morning of Oct. 2, 2009.

“Here in March 2018, the sense of calm washing back into stock and bond markets leaves little urgency to bid gold prices much higher right now,” Ash told MarketWatch.

On Wednesday, the ICE U.S. Dollar Index DXY, +0.17%  rose 0.1% to 89.79, but the index is down roughly 0.9% so far this month.

Read: Here’s the ideal amount of gold to keep in your investment portfolio

Plus: Inflation is rattling markets—here’s what you should know about consumer prices

“With concerns revolving around U.S protectionism and political drama leaving investors on edge, gold could bounce back to life,” said Lukman Otunuga, research analyst at FXTM. “While in the medium to longer term, expectations of higher U.S. interest rates are likely to create headwinds for the metal down the road, short-term bulls could benefit from the current uncertainty.”

Data earlier this week showed a mild reading for consumer-level inflation.

Rising inflation could add pressure on the Fed to speed up its rate rises, which could lift the dollar, though strangle the stock market. Gold, in turn, although negatively affected by higher interest rates, could attract hedging demand against too-hot inflation. The impact of trade policy has also served as a backdrop to recent trading.

“Safe-haven gold may find support if the stock markets were to come under pressure again, and more so if the dollar were to also fall further in the event of retaliation to Trump’s protectionist policies,” said Fawad Razaqzada, technical analyst with FOREX.com. “In the short-term, however, a lot will depend now on the Fed’s inflation and rate hike projections next week.”

Razaqzada stressed that gold’s repeated failure to get past the 2017 high of $1,357 and the fact that it has formed a lower low just ahead of the $1,300 long-term support line are the mixed technical signals keeping the metal in a rangebound market.

As for other metals, May silver SIK8, -0.46%  fell 0.3% to $16.585 an ounce.

Read: Silver is poised to outpace gold this year

Among exchange-traded funds, the silver-focused exchange-traded iShares Silver Trust SLV, -0.16%  was unchanged and the SPDR Gold Shares GLD, -0.14% was down 0.2%. The VanEck Vectors Gold Miners ETF GDX, +0.37% rose 0.3%.

May copper HGK8, +0.49%  added 1.3% to $3.18 a pound. April platinum PLJ8, -0.42% fell 0.1% to $966.30 an ounce, while June palladium PAM8, +0.09%  added 0.8% to $999.30 an ounce.

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