UPDATE: Gold prices tally a second straight gain but hover near lows of the year

04/25/19 02:17 PM EDT

By Myra P. Saefong, MarketWatch , Rachel Koning Beals

Gold futures tallied back-to-back gains on Thursday, but found only modest support for the session against a backdrop of mixed trading in the U.S. stock market on the heels of the latest earnings reports and economic data.

Gold for June delivery tacked on 30 cents, or 0.02%, to settle at $1,279.70 an ounce. The most-active contract settled at its lowest levels since about Dec. 26 on Tuesday, according to FactSet data, before a 0.5% rebound on Wednesday.

May silver fell back by 3.7 cents, or 0.3%, to $14.879 an ounce after Tuesday's 0.9% climb.

The SPDR Gold Shares exchange-traded fund (GLD) added 0.1%, but the miner-focused VanEck Vectors Gold Miners ETF (GDX) traded down 1.2%.

Gold moved higher "in response to U.S. equity markets earnings reports in a couple of names outside of technology," 3M Co (http://www.marketwatch.com/story/3ms-stock-tumbles-after-earnings-miss-and-slashed-outlook-to-cut-2000-jobs-2019-04-25). and United Parcel Services Inc (http://www.marketwatch.com/story/ups-shares-slide-after-earnings-and-sales-miss-2019-04-25).(UPS), said Jeff Wright, executive vice president of GoldMining Inc. Both of the companies missed earnings expectations.

That points "towards challenging economic conditions with two broad macro influenced stocks," he said.

U.S. stock indexes saw mixed trading Thursday (http://www.marketwatch.com/story/dow-futures-under-pressure-as-3m-co-says-it-will-cut-2000-jobs-nasdaq-set-to-resume-climb-2019-04-25) as gold futures settled, with the Dow Jones Industrial Average turning lower week to date--offering a reason for haven gold to move up, but other key stock indexes moved up following Facebook Inc.'s (FB) better-than-expected earnings.

The longer-term outlook "remains weak for the precious metal as the U.S. economy still remains strong and trade deal optimism could deliver a boost to global growth in the coming months," said Edward Moya, senior market analyst at Oanda.

Data Thursday showed that U.S. durable-goods orders leapt 2.7% (http://www.marketwatch.com/story/durable-goods-orders-surge-27-to-7-month-high-business-investment-rebounds-2019-04-25) last month, the biggest increase since last summer, potentially signaling a rebound in the slower-growing industrial side of the economy.

Against that backdrop, the ICE U.S. Dollar Index was little changed at 98.150, holding near its highest levels (http://www.marketwatch.com/story/dollar-extends-march-higher-as-global-central-banks-turn-dovish-2019-04-25) in nearly two years. It was up 0.7% week to date. A stronger U.S. unit can make buying the buck-pegged commodity comparatively more expensive for investors using other currencies.

Gold "formed a high of $1,346 in February this year and ever since the price has been in a downtrend with lower highs and lower lows," said Naeem Aslam, chief market analyst with ThinkMarkets.

Aslam, however, thinks that investors shouldn't forget the protective use of gold, particularly if investors want to take their cues from the recent gold buying of the People's Bank of China. It had paused gold buying for nearly six years until renewing such purchases in December and steadily buying each month since.

There may be a lack of near-term impetus to hedge against risk-market uncertainty, but "I think it is an interesting and alarming factor that investors are not thinking of insuring their portfolio while Beijing is bolstering its gold reserves," Aslam said. "The PBOC has pushed the credit default curve lower and yet it is buying protection for itself. Caution should be taken here."

Among other metals, May copper lost 1.7% to $2.862 a pound. July platinum rose 0.1% to $889.70 an ounce and June palladium settled at $1,406.90 an ounce, up 0.1%.

-Myra P. Saefong; 415-439-6400; AskNewswires@dowjones.com

 

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04-25-19 1417ET

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