Gold futures settled higher on Wednesday, a day after posting a nearly three-week low, with the metal finding modest support from weakness in U.S. stocks.
Futures prices held onto those gains in electronic trade, shortly after the release of the minutes from the rate-setting Federal Open Market Committee's April 30 - May 1 meeting showed that voting members seemed comfortable with their patient stance on interest rates.
Committee members showed a "patient approach to rates," and noted that "some downside risks to growth remain," said George Gero, managing director at RBC Wealth Management, in an email update. "All as expected, but gold and silver [were] acting relatively well in spite of dollar index in [the] 98 area."
Ahead of the meeting minutes, June gold GCM19, -0.06% on Comex climbed $1, or nearly 0.1%, to settle at $1,274.20 an ounce. The finish on Tuesday at $1,273.20 was the lowest most-active contract settlement since May 2, according to FactSet data. In electronic trading right after the Fed minutes, prices were at $1,274.30.
Gold's modest gain for the session came as benchmark U.S. stock indexes moved broadly lower, with the Dow Jones Industrial Average DJIA, -0.39% down some 70 points, or 0.3%, as gold futures settled.
The yellow metal has mostly failed to catch a strong bid amid continuing China-U.S. trade uncertainty, which would normally support bullion buying.
"Despite this major [trade talk] uncertainty, there is no appetite among traders for holding the safe-haven gold," said Naeem Aslam, chief market analyst at TF Global Markets, in a report.
He pointed to data showing the SPDR Gold ETFGLD, -0.10% has experienced its largest outflow since 2016, with an outflow exceeding $926 million in the first week of May alone. Notably, last week, the inflow was $120 million, which was better than the previous week's outflow number of $303 million.
"Instead, the gold price has lost value due to the strength in the dollar indexDXY, +0.06% and this trend is still robust," Aslam said.
The dollar index DXY, +0.06% was little changed at 98.056 in Wednesday dealings, but it trades around 0.6% higher month to date.
Chintan Karnani, chief market analyst at Insignia Consultants, believes that "momentum for gold is very bearish at the moment," as "short term investors are not investing in gold and prefer stocks."
Long-term investors of gold, however, "are searching for a price bottom to invest," he said. Gold needs trade over $1,280 for seven trading days "to attract traders and investors."
As for the trade front, China's ambassador to the U.S. said late Tuesday that Beijing was open to restarting trade talks, but that the U.S. was indecisive. Meanwhile, President Xi Jinping has tried to rally the country, with a call for Chinese to start a modern "long march" to brace against the possibility of a lengthy trade conflict with the U.S.
Read: Charts suggest there could be a bull market in gold after eight lean years
Among other metals traded on Comex, July silver SIN19, -0.20% added 3.9 cents, or 0.3%, to $14.449 an ounce, but July copper HGM19, -1.40% lost 3.7 cents, or 1.3%, to $2.678 a pound. July platinum PLN19, -0.61% fell $10.10, or 1.2%, to $805.30 an ounce and June palladium PAM19, -0.51% settled at $1,313.50 an ounce, up $1, or nearly 0.1%.
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