Gold futures settled below the psychologically significant price of $1,300 an ounce on Tuesday, as equity benchmarks rebounded from a period of trade-related uncertainty.
June gold GCM9, -0.06% receded by $5.50, or 0.4%, to end at $1,296.30 an ounce, giving back part of the 1.1% gain on Monday. The settlement a day earlier was the first above $1,300 and highest most-active contract finish since April 10, according to FactSet data.
The SPDR Gold Shares ETF GLD, -0.06% meanwhile, was down 0.3% and the gold-miners focused exchange-traded VanEck Vectors Gold Miners ETF GDX, -0.24% dropped 0.9%.
July silver SIN9, -0.15% added 3.5 cents, or 0.2%, at $14.812 an ounce, after slipping 0.1% in the previous session.
Wall Street investors derived a modicum of optimism from recent comments from President Donald Trump, who said late Monday that it should be clear in "three or four weeks" if a U.S. delegation's recent trip to China to discuss trade was successful. "I have a feeling it's going to be very successful," he said, lifting market sentiment that has been buffeted by worries about intensifying tensions between the world's largest economic superpowers, which could pose a threat to the health of global markets.
"Clearly, gold, like equity indices, has become a headline-driven market," said Fawad Razaqzada, technical analyst at Forex.com. "Incoming headlines regarding the ongoing U.S.-China trade dispute, and specifically Donald Trump's tweets, have led to some sharp moves in recent days."
Trump "sounded a tad more conciliatory today towards China, but I reckon investors are slowly becoming aware of Trump's tactics. His words will have diminishing returns in terms of market impact," he said in an afternoon update.
"While trade uncertainty remains, safe-haven gold 'should' remain supported," though gold investors "will also have to consider the impact on physical demand from China in the event of a no deal," said Razaqzada.
U.S. stocks, which tend to rise as gold falls, were bouncing off their recent lows, with the Dow Jones Industrial Average DJIA, +0.45% and the S&P 500 index SPX, +0.58%headed sharply higher in Tuesday dealings.
On Monday, China announced that it would impose tariffs that could reach 25% on $60 billion in annual U.S. exports on June 1, after the U.S. last week raised tariffs on $200 billion in annual Chinese imports to 25% from 10%.
Amid those developments, a reading of trade, the import price index, climbed 0.2% last month, the government said Tuesday, below Wall Street forecasts calling for an increase of as much as 1%.
Despite the slippage for gold on Tuesday, technical analysts say the recent climb signifies that the commodity is taking a bullish turn after somewhat listless trade. "In regards to the technical picture, gold is turning bullish on the daily charts as prices have broken above the previous higher low at $1290," wrote Lukman Otunuga, research analyst at FXTM, in a daily research note.
"Gold has experienced an incredible appreciation early this week with prices sprinting towards the psychological $1,300 level as risk aversion sent investors rushing to safe-haven assets," he wrote.
The analyst said that trade-war fears will remain a focus for investors.
Elsewhere on Comex, July platinum PLN9, -0.06% gained $4.20, or 0.5%, to $859.10 an ounce, while June palladiumPAM9, -0.73% added $16.20, or 1.2%, to settle at $1,333 an ounce.
Meanwhile, July copper HGN9, -0.02% which has been sensitive to the Sino-American trade tensions, rose less than a cent, or 0.2%, to $2.725 a pound. Trade jitters between the world's largest economies has the potential to hurt demand for the industrial metal.
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