Metals Stocks: Gold rebounds, takes aim at one-year high

Gold rebounded modestly Wednesday as stocks looked likely to pull back from record highs and a leading dollar index softened, setting the yellow metal on a path back toward the one-year settlement high just above $1,351 hit last week.

Trying to avoid a three-day losing streak, gold for December delivery GCZ7, +0.33%  rose $5.70, or 0.4%, to $1,338.60 an ounce. The settlement Tuesday at $1,332.70 was the lowest finish since Sept. 1, according to FactSet. The SPDR Gold Shares ETF GLD, +0.29%  was up less than 0.1% premarket.

The S&P 500 SPX, +0.34% looked vulnerable as stock-index futures teetered in early Wednesday trading. The ICE U.S. Dollar index DXY, -0.08%  was down by less than 0.1%, to 91.80.

Read: Gold bulls are looking for a ‘major breakout’ above $1,400 an ounce

The early-week retreat for gold followed its finish Friday at its highest since Sept. 6, 2016, for a most-active contract, according to FactSet. The metal gained 1.6% last week, its third-straight weekly gain, chiefly driven by concerns that North Korea was preparing to conduct another missile test over the weekend to mark the country’s Foundation Day. The weekend passed without a test. And new sanctions against North Korea agreed by the UN Security Council Monday were not as wide-ranging as the U.S. had originally demanded.

“Naturally there is still plenty of underlying geopolitical risk in the markets at the moment, even if acts of provocation have decreased and become less hostile, and this is likely to put a cap on risk rallies for now,” said Craig Erlam, senior analyst at Oanda.

“The longer this period of calm continues, the more relaxed investors will become which will be better for riskier assets, while safe havens will continue to experience unwinding,” he said. “Gold is a perfect example of this having come off its highs while remaining at elevated levels.”

The market’s Federal Reserve wait-and-see game continues with speakers shifting into a blackout commentary period ahead of a policy meeting next week. Producer prices are the lone major economic report on Wednesday’s lineup.

The Fed raised interest rates twice this year in response to steady growth and falling unemployment, but persistently soft inflation data have tempered market expectations for another hike before the year. Higher rates also boost the dollar, in which gold is priced.

Among other metals, December silver SIZ7, +0.59%  rose 10 cents, or 0.6%, to $17.995 an ounce, while the iShares Silver Trust ETF SLV, +0.72% edged up by 0.3%.

December copper HGZ7, -1.75%  fell 4 cents, or 1.6%, to $2.989 a pound, adding to its 2.5% weekly fall last week. Copper had been trading at a three-year high at one point last week.

October platinum PLV7, +0.23%  rose $2.10, or 0.2%, to $988.60 an ounce, after settling under $1,000 on Monday for the first time this month. December palladium PAZ7, -0.36% added $1.85, or 0.2%, to $945.25 an ounce.

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