Gold prices end lower as Fed meeting looms, US stocks rally – MarketWatch






















Gold futures settled Tuesday with a modest decline as investors turned their attention to a rally in the U.S. stock market ahead of the Federal Reserve’s monetary-policy meeting next week.

The meeting may determine the direction of the dollar and dollar-denominated commodities like gold.

Demand from Asian buyers helped keep a cap on any losses for gold with recent data showing that China bought 16 tons of the yellow metal in August, after purchasing 19 tons in July. The U.S. dollar












DXY, +0.00%










 also weakened a bit Tuesday, giving dollar-denominated gold prices some added support.

Still, gold for December delivery edged down by 40 cents to settle at $1,121 an ounce on Comex, after trading between a low of $1,114.70 and a high of $1,126.

“After riding out the risk-off slump in productive commodities last month, gold missed most of today’s risk-on rally,” said Adrian Ash, head of research at BullionVault. U.S. equities climbed Tuesday following gains in Europe and Asia amid bets that Beijing may implement further stimulus measures.

On Monday, there was no settlement for Comex gold because of the Labor Day holiday. Prices ended last week with a loss of more than 1%, pressured by expectations that the Fed may raise interest rates for the first time since 2006. The central bank’s next two-day monetary-policy meeting begins on Sept. 16.

A rate increase would be a boon for the dollar but commodities like gold, which is sold in dollars, would be more expensive to buyers in other currencies.

“The global decline of commodities and steady appreciation of the [U.S. dollar] continues to add pressure on this precious metal. If data from the United States this week is robust, then more pressure may be experienced for gold which may trigger a selloff to the next relevant support at $1,110 [an ounce],” said Lukman Otunuga, research analyst at FXTM in a Tuesday note.

On Friday, the contract shaved off $3.10 after the monthly U.S. nonfarm payrolls report offered a mixed picture of the health of the country’s labor market.

“The major catalyst for a potential heavy selloff in gold continues [to] revolve around whether the Federal Reserve begins to raise U.S. interest rates this year,” Otunuga said.

In other metals, December silver












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 rose 20.6 cents, or 1.4%, to $14.755 an ounce. High-grade December copper












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 settled up 12.2 cents, or 5.3%, at $2.434 a pound, rebounding after last week’s decline of around 1.5%.

Read: Copper prices may get a break as Glencore suspends two big mines

October platinum












PLV5, +0.26%










 ended at $1,002.90 an ounce, up $10.50, or 1.1% and December palladium












PAZ5, +0.65%










 tacked on $9.40, or 1.6%, to $586.55 an ounce.