Gold futures fell Wednesday ahead of the Thanksgiving holiday on Thursday, as U.S. stocks continued to push into record territory on better-than-expected economic data and optimism over trade talks between Washington and Beijing.
Gold for February delivery GCG20, +0.14%, the most active contract on Comex, settled down $6.60, or 0.4%, at $1,4560.8 an ounce, while December silver SIZ19, +0.02% declined 12 cents, or 0.7%, to $16.92 an ounce. U.S. financial markets will be closed Thursday for Thanksgiving Day, while abbreviated trading hours will be observed on Friday.
Read: When do markets close for Thanksgiving?
The yellow metal closed down 0.6% so far this week, consolidating around the $1,460-an-ounce level, as major U.S. stock indexes pushed to record finishes Monday and Tuesday, with more records likely in store for Wednesday, amid continued optimism over trade following upbeat comments on U.S.-China negotiations out of Washington and Beijing.
A positive tone for assets perceived as risky is often a negative for assets, like gold, that are considered traditional havens. Gold bulls argued that dynamic could be set to change.
“The upward momentum for riskier assets is in danger of petering out, with investors perhaps needing clear signs of progress beyond mere snippets of positive spin regarding the potential U.S.-China trade truce,” said Han Tan, market analyst at FXTM.
Tan also noted data from China early Wednesday that showed industrial profits continued to contract in October.
“Markets can only ignore the dismal economic data for so long, with the overnight release of China’s October industrial profits falling 9.9% drawing attention to the strains faced by the world economy,” Tan said.
In that vein, Bloomberg on Wednesday reported that huge bets were placed in the options market that gold could triple to $4,000 an ounce.
U.S. economic data, meanwhile, was largely upbeat, including a revised estimate of third-quarter GDP that showed the U.S. economy expanded at a 2.1% annual pace versus a previous estimate of 1.9%.
Separately, the number of people who applied for first-time unemployment benefits fell sharply in the week before Thanksgiving. Initial claims declined 15,000 to 213,000 in the week ended Nov. 23, the Labor Department said, though many economists caution against reading too much into any one week’s worth of claims data around this time of year.
Also, orders for durable goods rose 0.6% in October, the government said, defying forecasts for a 1.1% drop, though most of the gain was tied to defense-related goods such as jet fighters and ships.
U.S. consumer spending rose in October for the eighth month in a row, a potentially good sign for the holiday shopping season that gets underway after Thanksgiving with Black Friday specials.
The Fed’s “Beige Book” compilation of anecdotal economic information from across the country also showed a slight pickup in the U.S. economy ahead of the holiday season.
In other metals trade, January platinum PLF20, +0.08% fell 1.7% to $895.4 an ounce, while December palladium PAZ19, +0.31% edged up 1.3% to $1,805.9 an ounce.
December copper HGZ19, -0.52% added 0.6% to $2.696 a pound.