Gold edged lower Tuesday, taking a cue from a stronger U.S. dollar, while silver built on the previous session’s gain after settling at a 13-month high.
Gold for August delivery on Comex GCQ19, -0.25% declined $2.50, or 0.2%, to $1,424.40 an ounce. Prices saw a brief pop higher in the immediate wake of some downbeat data, which showed a fall in June U.S. existing home sales.
September silver SIU19, +0.39% however, rose 4.9 cents, or 0.3%, to $16.46 an ounce. It settled Monday at its highest since June 2018. It’s poised to tally its seventh gain in eight sessions.
Read: Silver rallies to its highest in over a year, plays ‘catch up’ to gold’s gains
“Firmness in silver prices will draw more and more people with less amount to invest,” said Chintan Karnani, chief market analyst at Insignia Consultants. “Silver is behaving like a low price safe haven and will attract more and more retail investment.”
The trend for silver will depend on next week’s Federal Open Market Committee policy decision and monthly U.S. nonfarm payrolls data, says Karnani. “If silver manages to trade over $16.715 after the FOMC and payrolls data, then $19.825 “will be reached by the end of August.”
For now, however, strength in the dollar appeared to putting more pressure on dollar-denominated prices of gold. The ICE U.S. Dollar Index DXY, +0.40% , a measure of the currency against a basket of six major rivals, rose 0.5% to trade near 97.71 after trading at around a one-month high following a deal between President Donald Trump and congressional leaders announced a deal late Monday on a debt and budget agreement that would avert the possibility of a government shutdown or federal default.
A stronger dollar can be a negative for commodities priced in the U.S. unit, making them more expensive to users of other currencies.
The removal of budget-related risk also dented haven-related demand for gold, as did a continued stream of well-received second-quarter results from U.S. companies as earnings season continues, said Edward Moya, senior market analyst at Oanda, in a note.
In other metals trade, October platinum PLV19, +0.69% rose $4.30, or 0.5%, to $857 an ounce, while September palladium PAU19, -0.82% fell $11.90, or 0.8%, to $1,517.30 an ounce. September copper HGU19, -0.86% was off 2.6 cents, or 0.9%, to $2.697 a pound.