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Gold churns near unchanged as haven assets snubbed

MARKETWATCH 8:05 AM ET 9/29/2016
Symbol Last Price Change
SLV 18.21 0 (0%)
GDX 26.915up +0 (+0%)
QUOTES AS OF 04:00:00 PM ET 09/28/2016

Silver, related ETFs edge higher

Gold futures languished near little changed in choppy action on Thursday, threatening a third straight loss, as concerns about troubled German financial giant Deutsche Bank eased and dulled the appeal of gold as a mostly short-term hideout.

What's more, the dollar gained, which tends to send gold lower, as traders settled in for more Federal Reserve commentary. Fed remarks so far this week have pointed to a December U.S. rate increase.

December gold was virtually unchanged from late Tuesday, at $1,323.70 an ounce but had been mostly lower earlier.

The ICE U.S. Dollar Index edged up by 0.1%.

Choppy action could continue as global investors assess the bigger picture. Stocks, for one, were fighting to hold their modest premarket gains (http://www.marketwatch.com/story/wall-street-stocks-could-struggle-as-euphoria-over-opec- deal-fades-2016-09-29) as bullish euphoria tied to an OPEC production pledge faded for now.

"Gold prices continued to edge lower as...a measure of credit risk declined amid seemingly easing worries about beleaguered German lender Deutsche Bank," said Ilya Spivak, currency strategist with Daily FX. "The firm's shares rose 3.2%, marking the largest gain in nearly weeks. Fears that Deutsche's troubles may translate into broader bank sector instability fueled demand for cash as well as alternative stores of value."

Read:Crisis at Europe's banks threatens to roil global markets (http://www.marketwatch.com/story/a-crisis-in- european-banks-threatens-to-roil-global-markets-2016-09-28)

Gold futures settled lower Wednesday for a second straight session as traders remain focused on Fed speakers this week. Chairwoman Janet Yellen's testimony at a House hearing (http://blogs.marketwatch.com/capitolreport/2016/09/28/ live-video-and-blog-of-feds-janet-yellen-testifying-at-house-hearing/) didn't say much about monetary policy but several Fed officials were slated to make remarks this week, which could have implications for currency and stock market trading--and influence demand for precious metals.

Yellen did say the financial conditions of the top U.S. banks has "strengthened considerably" since the financial crisis.

On Tuesday, San Francisco Fed President John Williams told Reuters that he would support an increase-rate increase and that the central bank can raise rates without threatening the U.S. economy.

Gold's "down move may continue amid firming Fed rate bets if upcoming commentary from central bank officials echoes Chair Yellen's near-promise of tightening in December, a position she reiterated yesterday," Spivak said.

Read:How a gold miner turned a $1 million investment into $3 billion (http://www.marketwatch.com/story/meet-the- mining-chief-who-wants-to-get-his-company-into-the-sp-500-2016-09-28)

Silver for December delivery added 3 cents, or 0.2%, to $19.15 an ounce.

The SPDR Gold Trust ETF (GLD) was down 0.3%, iShares Silver Trust(SLV) traded up 0.2%, while the VanEck Vectors Gold Miners ETF(GDX) rose 2%.

-Rachel Koning Beals; 415-439-6400; [e-mail]


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