Metals Stocks: Gold, silver churn lower as Fed-watch continues



Gold and silver’s near-term trading direction likely hinges on tone of the Fed’s Janet Yellen’s Friday speech.

Gold futures slipped Wednesday, remaining snarled in tight trading ranges alongside the dollar as investors hope for clarity this week on the near-term path for interest rates.

Precious metals and the dollar have twisted amid shifting expectations about the Fed’s interest-rate policy, especially ahead of a closely watched retreat in Jackson Hole, Wyo., where Federal Reserve Chairwoman Janet Yellen will speak on Friday. Economists have said the Fed itself remains very data-dependent as it looks ahead to the final policy meetings of 2016, but that’s done little to dissuade market speculation.

Read: Fed going out to Jackson Hole to get divorce from markets

Early Wednesday, December gold

GCZ6, -0.33%

  slipped $4.80, or 0.4%, to $1,341.30 an ounce.

The dollar largely gained versus major rivals, leaving the ICE Dollar Index

DXY, +0.12%

up a slim 0.1%. U.S. stocks also lacked clear direction in the paralyzing wait for the Fed’s next clues.

Read: Inverse relationship between gold, stocks has never been this extreme

A firmer dollar tends to make the gold priced in this currency less attractive to investors. Higher interest rates can also turn investors away from nonyielding gold in favor of alternatives that typically fare better in a rising-rate climate.

Despite the back-and-forth pull, there’s a near-term bias in favor of the dollar and against gold, said Ilya Spivak, currency strategist, with FXCM’s DailyFX.

“A shift in priced-in policy bets implied in Fed funds futures hints investors are leaning toward a hawkish outcome, hinting the greenback may find fuel for greater gains as the end of the week draws closer,” he said.

Earthquake in central Italy kills dozens

A deadly 6.2-magnitude earthquake struck central Italy early Wednesday, killing at least 38 people and leaving many trapped under collapsed buildings.

The probability of a rate hike in December now stands at 53.9% compared with 51% last week and 45.1% a month ago, according to the CME Group’s FedWatch tool.

Meanwhile, December silver

SIZ6, -0.50%

  risked pausing the back-to-back gains that lifted it at the start of the week. The contract slipped 10 cents, or 0.5%, to $18.97 an ounce.

Among exchange-traded funds Tuesday, the SPDR Gold Trust

GLD, -0.02%

 was down 0.1% premarket, while the iShares Silver Trust

SLV, -0.22%

  fell 0.1%. The VanEck Vectors Gold Miners ETF

GDX, -1.49%

  was up 0.3%.

Back on Comex, the now-most-active December copper contract

HGZ6, -0.63%

  lost 1 cent, or 0.5%, to $2.12 a pound. October platinum

PLV6, -0.16%

  shed $2, or 0.2%, to $1,109.30 an ounce. September palladium

PAU6, -0.34%

  fell $1.45, or 0.2%, to $698 an ounce.

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