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Metals Stocks: Gold futures trade lower after touching the highest intraday level since June

Gold futures traded lower on Tuesday after touching their highest intraday price in five months, as investors digested the latest U.S. economic data which included a rise in October retail sales despite high inflation, and a monthly surge in industrial output.

“It is to wait and watch for gold,” said Chintan Karnani, director of research at Insignia Consultants, adding that Wednesday’s gold settlement will likely set the trend for the rest of November.

“Short-term gold investors and physical gold buyers (in Asia) will buy only if they are convinced that gold price has the juice to float over $1,900,” he told MarketWatch. If not, then prices may test the $1,825.30 and $1,793.30 levels, he said.

The Comex December gold contract expires in late December, FactSet data show. “Position squaring and rebuilding has now started for February futures,” said Karnani.

The decline for gold came amid a slight pop higher in the U.S. dollar, as measured by the ICE U.S. Dollar Index
DXY,
+0.33%
,
which was up 0.4% on Tuesday, hanging near its highest level in about 16 months. A firmer dollar can make assets priced in the currency comparatively more expensive to overseas buyers.

“Sharp gains in the U.S. dollar Index is preventing gold prices from breaking past $1,900,” said Karnani.

December gold
GCZ21,
-0.21%

GC00,
-0.21%

was trading $1.40, or 0.1%, lower at $1,865.20 an ounce, after touching a high of $1,879.50, the highest intraday level for a most-active contract since June 14, FactSet data show.

Prices fell 0.1% on Monday, ending a string of gains of the longest string of gains for a most-active contract, seven straight days, since a nine-day rise that ended on July 29, 2020, according to Dow Jones Market Data.

Silver for December delivery
SIZ21,
-0.04%

tacked on 1.5 cents, or nearly 0.1%, at $25.12 an ounce.

U.S. retail sales jumped by 1.7% in October, the government said Tuesday — the biggest gain since March, with as much as half the increase tied to higher prices. Economists polled by The Wall Street Journal forecast a 1.5% increase.

October industrial production also climbed by 1.6%, the Federal Reserve reported Tuesday. That was above expectations for a 0.8% gain, according to a survey by The Wall Street Journal.

Meanwhile, December copper
HGZ21,
-1.20%

shed 1.4% to $4.338 a pound. January platinum
PLF22,
-1.50%

also fell by 1.1% to $1,084.50 an ounce, but December palladium
PAZ21,
+0.41%

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