By Myra P. Saefong and Mark DeCambre
Gold futures settled with a loss on Monday for a second straight session, pressured by a rise in bitcoin and some strength in U.S. Treasury yields but a retreat in most global stock markets helped to limit price losses for the precious metal.
“Continued strength in bitcoin, which climbed above the $62,000 level for the first time since April, has been a notable source of pressure on the precious metals,” analysts at Zaner wrote in a daily report Monday.
Also, “lukewarm” Chinese economic data and growing market acceptance that the Federal Reserve will begin tapering its bond purchases by the end of the year have weighed on the markets as well, they said.
December gold /zigman2/quotes/210034565/delayed GC00 +0.38% /zigman2/quotes/210039437/delayed GCZ21 +0.38% fell $2.60, or nearly 0.2%, to settle at $1,765.70 an ounce, following a 0.6% weekly gain on Friday, which represented the steepest weekly climb since the week ended Sept. 3.
Gold “buyers are showing strength every time that the price is getting closer to the support zone of $1,750 per ounce,” said Carlo Alberto De Casa, market analyst at Kinesis Money, in a note. However, the rebound to $1,800 last week was “probably too quick and sellers again added pressure on gold.”
The price move for bullion comes even as stocks around the globe were mostly lower. The U.S. benchmark stock indexes were mixed with the Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA -2.53% down but the Nasdaq Composite /zigman2/quotes/210598365/realtime COMP -2.23% and S&P 500 /zigman2/quotes/210599714/realtime SPX -2.27% moving higher, as investors struggled with the reality of higher inflation and uneven economic expansion.
The economy of one of the biggest buyers of gold also revealed further evidence of its retrenchment, weighing on precious metal values. GDP data on Monday showed that China’s economy grew 4.9% in the third quarter from a year prior, down steeply from the second quarter’s 7.9% rate.
The gold market has had a significant selloff following its failure to clear the psychologically and technically strong level of $1,800 “with the price also breaking out of the lower band of its bullish channel,” wrote Pierre Veyret, technical analyst at ActivTrades, in a note.
He said the dynamic for gold was now bearish, with the next support level between $1,757 and $1,731, based on technical analysis.
Meanwhile, December silver /zigman2/quotes/210319421/delayed SIZ21 +0.16% /zigman2/quotes/210315219/delayed SI00 +0.16% declined by 9 cents, or 0.4%, to $23.264 an ounce, after producing a 2.8% gain last week.
Trading in precious metals come as the 10-year Treasury note yield /zigman2/quotes/211347051/realtime BX:TMUBMUSD10Y 0.00% was staging a new assault on 1.6%, around its highest level since June. The U.S. dollar traded nearly flat for the session, as measured by the ICE U.S. Dollar Index, which fell last week after five consecutive weeks of gains, according to FactSet data.
Rising yields can undercut appetite for nonyielding gold and a stronger dollar can make the dollar-pegged asset comparatively more expensive to overseas buyers.
Among other metals traded on Comex, December copper /zigman2/quotes/210059552/delayed HGZ21 -0.11% shed nearly 0.1% to $4.726 a pound. January platinum /zigman2/quotes/222209103/delayed PLF22 -0.15% lost 2% to $1,037.90 an ounce and December palladium /zigman2/quotes/221433715/delayed PAZ21 -1.99% settled at $2,013.10 an ounce, down 3.1%.