Updated from 11:12 a.m. EST with afternoon action and settlement prices
Gold for April delivery lost $2.90 to settle at $1,673.50 an ounce at the Comex division of the New York Mercantile Exchange. The gold price traded as high as $1,687 and as low as $1,667.20 an ounce, while the spot price was off $1.50, according to Kitco's gold index.
Gold prices initially moved higher after Bank of Japan Gov. Masaaki Shirakawa told reporters in Tokyo that he would step down on March 19, likely paving the way for Prime Minister Shinzo Abe to push for even greater accommodative monetary policy.But the ISM Non-Manufacturing Index printed Tuesday at 55.2% for January, a signal of rising momentum for employment for the sixth straight month. Gold prices are closely tied to labor market trends as the Federal Reserve has pegged its low interest rates policy until the unemployment rate drops to 6.5%. Many analysts view the end of low interest rates as a suggestion that central bank quantitative easing would conclude, as well. The ISM announcement reversed earlier gains after the Bank of Japan news. Even before returning as the leader of Japan, Abe had argued for greater easing policies by the central bank. Abe's pressure on the central bank, at one point, had elicited criticism from Shirakawa who called for respect of the Bank of Japan's independence. Silver prices for March delivery increased 16 cents to $31.88 an ounce, while the U.S. dollar index was off 0.05% to $79.52. Investors typically view looser monetary policy as inflationary, and a more accommodative stance from Japan may drive more traders to the yellow metal as an asset hedge against inflation. The greenback was surging to ¥93.36 yen against the prior day's close at ¥92.38. Funds may also be turning back to the gold market. "The euro is steady, it looks like stocks moving higher and gold moving higher signal a measure of the return of the funds that I've been looking for, slowly, as low open interest on the Comex -- around 424,000 round numbers -- is still low and room for the funds to come back in," George Gero, precious metals strategist at RBC Wealth Management, said in an interview. The euro was rising slightly Tuesday against the U.S. dollar to $1.3578, up from the prior day's close at $1.3514, a day after news that Spain's opposition Socialist Party had called on the country's prime minister to step down and after the prospect reemerged that former Italian Prime Minister Silvio Berlusconi would challenge for his old post.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV