Gold trades lower as dollar, equities aim higher
By Rachel Koning Beals
Silver futures are down 0.5% on Monday
Gold futures were trading lower on Monday to start the fourth quarter as a strengthening dollar weighed on the precious metal and U.S. equities looked set to test fresh records.
Gold for December delivery on Comex fell $9.20, or 0.7%, for the session at $1,275.50 an ounce. The move comes after futures ended last week down roughly 1%, and shed 2.7% for the month, according to FactSet data. For the quarter, however, gold prices ended up around 3.6% (http://www.marketwatch.com/story/gold-ticks-higher-as-traders-weigh-tax-cut-prospects-rate-hikes-2017-09-29).
The exchange-traded SPDR Gold Shares ETF (GLD), meanwhile, was off 0.4% early Monday.
December silver shed 8 cents, or 0.5%, to $16.595 an ounce. Silver ended last week with a loss of 1.8%, and 4.8% for the month. The metal logged a roughly 1% rise for the quarter. The exchange-traded iShares Silver Trust (SLV) was down 0.6% early in the session.
Metals declined despite a mass shooting late-Sunday on the Las Vegas Strip that has so far left at least 50 dead and scores (http://www.marketwatch.com/story/reports-of-dead-injured-after-mass-shooting-at-las-vegas-concert-2017-10-02) more injured.
The ICE Dollar Index , a measure of the U.S. unit against a basket of six major rivals, was up 0.5% early Monday, after booking a 1% rise last week. A stronger dollar makes commodities priced in the currency more expensive for buyers using weaker currencies.
Pressure for metals also comes as yields for Treasurys have climbed on heightened expectations for further rate increases by the Federal Reserve before the end of 2017 and elevated hope that President Donald Trump's administration will implement tax policies, including tax cuts and repatriation (http://www.marketwatch.com/story/what-we-know-and-dont-know-about-trumps-tax-plan-2017-09-29) of money held abroad, that are considered pro market.
Rising yields can making owning gold, which doesn't bear a yield, less attractive compared with Treasurys and other instruments. The yield on the benchmark 10-year Treasury note was at 2.347%, versus 2.13% at the beginning of September. Meanwhile, U.S. stocks, including the Dow Jones Industrial Average and the S&P 500 index looked set to trade in record territory (http://www.marketwatch.com/story/us-stock-futures-inch-higher-putting-the-sp-500-on-track-for-another-record-2017-10-02).
Looking ahead, Markit is slated to release a report on manufacturing activity at 9:45 a.m. Eastern Time, followed by the Institute for Supply Management's more closely watched September manufacturing index at 10 a.m. Eastern. Economists polled by MarketWatch expect a reading of 58.1% for the ISM index, down from 58.8% in August (http://www.marketwatch.com/story/ism-manufacturing-index-jumps-to-six-year-high-in-august-2017-09-01). A release on construction spending is also scheduled to arrive at 10 a.m. Eastern, with expectations for 0.4% growth in August.
Read:What's next for industrial metals after a third-quarter rally? (http://www.marketwatch.com/story/whats-next-for-industrial-metals-after-a-third-quarter-rally-2017-09-29)
-Rachel Koning Beals; 415-439-6400; AskNewswires@dowjones.com
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