Gold futures on Thursday ended slightly lower, retreating from the highest finish in nearly three weeks, taking cues from a rally in stocks that hinted that investors were wading deeper into assets perceived as risky after a period of turbulence in equities.
April goldGCJ8, +0.01% fell $2.70, or 0.2%, to $1,355.30 an ounce after a settlement at $1,358 Wednesday. The gold-backed exchange-traded fund SPDR Gold SharesGLD, +0.12% was little changed while the VanEck Vectors Gold Miners ETFGDX, -0.09%) slipped 0.4%.
The slippage for gold came as a parade of data was released, with a focus on signs of rising inflation.
Indeed, U.S. wholesale prices shot up 0.4% in January, with higher oil prices delivering the biggest jolt to that reading. A more stable measure known as core PPI also rose 0.4%, suggesting price pressures are more widespread. And two snapshots of regional factory activity furthered the hotter inflation picture.
Gold slipped even as the ICE U.S. Dollar IndexDXY, -0.02% a measure of the currency against six main rivals, fell 0.4% to 88.756. Precious metals, which are often pegged to dollars, tend to rise when the buck weakens because weakening greenback can make buying those assets relatively cheaper for investors using strengthening monetary units.
"I think gold is really reacting to a myriad of forces at the moment-some economic and some political," said Jeffrey Nichols, managing director at American Precious Metals Advisors.
"We have significant heightened uncertainty and the implications on the stock market and for gold," he added, pointing to the risk of higher interest rates of unsettling equity investors.
Expectations of a possible fourth interest rate increase this year by the Federal Reserve have grown after recent inflation figures and after the central bank shared its forecast of an inflation pickup later this year. Nevertheless, commodity buyers will still watch for signs of a sustainable rise in consumer prices.
Rising yields, in theory, should detract from the appetite for gold because precious metals don't bear a yield. However, accelerating inflation could also provide a lift for precious metals because it is often viewed as a hedge against inflation. Gold had been moving higher over the last few days after the futures contract erased 1.6% last week in its worst performance in two months.
Jim Wyckoff, senior analyst with metals firm Kitco.com, said gold was on a minor corrective path from its gains in the previous session. "Bulls' next upside technical objective is closing prices above chart resistance at the January high of $1,370.50," he said.
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In other metals trading, March silverSIH8, +0.08% fell 8.2 cents, or 0.5%, to $16.796 an ounce, while the silver-focused iShares Silver TrustSLV, +0.00% off by 0.3%.
March copperHGH8, +0.00%fell less than a penny, or 0.3%, to settle at $3.2455 a pound, April platinumPLJ8, +0.22% added $2, or 0.2%, to $1,001.10 an ounce and March palladiumPAH8, +0.53% rose $9.35, or 0.9%, to end at $1,006.65 an ounce.