Gold futures broke sharply lower Tuesday after upbeat U.S. economic data added to pressure from climbing rates in the benchmark 10-year Treasury, leaving the metal’s price flirting with a seven-month low and a test below the closely watched $1,300 line.
Gold is also on track for a sixth loss in seven sessions as those reports showed sales at U.S. retailers rose in April for the second straight month[1], adding to evidence the economy sped up after a slower start to the year. A separate report showed a sharp snap back in New York economic growth.
In response, June gold GCM8, -1.93%[2] was recently off $19.40, or 1.5%, to $1,299.30 an ounce. The contract has now shed some 4.6% since a recent peak of $1,322.30 was hit just last week, a roughly two-week high.
“Importantly, the yellow metal has fallen below major technical support at $1,300,” said Jim Wyckoff, senior analyst at Kitco Metals. “The drop below that key level set off a large number of pre-placed sell stop orders in the futures market, to drive prices still lower. The U.S. dollar index has resumed its trek north today, which is, and has been, a significantly bearish force working against the precious metals bulls.”
A close at current levels, if it holds, would represent the lowest for a most-active contract since Dec. 28, when it settled at $1,297.20, according to FactSet data. The retreat for gold also pushes the commodity below its 200-day moving average at $1,307.80 for the first time since late December.
July silver SIN8, -2.58%[3] fell more than 2% to $16.275 an ounce.
Exchange-traded funds logged sizable pre-market drops, the SPDR Gold Shares GLD, -1.57%[4] traded down 1.2%, while the iShares Silver Trust SLV, -1.80%[5] shed 1.6%. The VanEck Vectors Gold Miners GDX, -2.59%[6] fell 1.8%.
The ICE U.S. Dollar Index DXY, +0.82%[7] climbed 0.6% to 93.25, rising for a second straight day. A firmer U.S. currency leaves dollar-priced gold less appealing to...