This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Gold Prices Turn Negative (Update 1)

Updated from 11:12 a.m. EST with afternoon action and settlement prices

NEW YORK ( TheStreet) -- Gold prices retreated Tuesday, despite an early rally on news that the chief of Japan's central bank said he would leave his post in March.

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.

1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
GOLD $74.24 0.00%
GDX $19.76 0.00%
IAU $11.63 0.00%
AAPL $132.65 0.00%
FB $81.91 0.00%

Markets

DOW 18,037.97 -42.17 -0.23%
S&P 500 2,108.92 -8.77 -0.41%
NASDAQ 5,060.2460 -31.8390 -0.63%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs