Gold Gains as U.S. Durable Goods Data Underscore Growth Concerns

Goldman's Currie: Base Case for Gold Is $1,300
  • Japan central bank may spend $265 billion to boost economy
  • Copper futures extend losses on durable goods, drop in oil

Gold gained for a second straight day after U.S. durable-goods orders dropped, adding to speculation that Federal Reserve policy makers will be slow to raise interest rates. Copper futures posted the biggest loss in a month.

Bookings for goods meant to last at least three years slid 4 percent in June, a bigger fall than forecast and the most since August 2014. Gold settled just as the Fed concluded a two-day meeting, where policy makers left interest rates unchanged while saying risks to the U.S. economy have subsided.

Gold has climbed 26 percent this year, partly as the Fed indicated it would hold rates lower for longer. Central banks have pledged more monetary easing amid concerns over fallout from the U.K.’s vote to leave the European Union. Japan Prime Minister Shinzo Abe announced plans for more than 28 trillion yen ($265 billion) to help prop up the economy.

“With everything that’s been happening around the globe, you’ve got stimulus, negative interest rates and Brexit, and so you have enough of a reason for the Fed to postpone moving the needle,” George Gero, a managing director for RBC Wealth Management in New York, said in a telephone interview. “The betting is that the Fed may have a hawkish tone, but they’re not going to raise rates, and that’s good for gold.”

Gold futures for December delivery advanced 0.5 percent to settle at $1,334.50 an ounce at 2:00 p.m. on the Comex in New York, the first consecutive gain in a week.

Copper extended losses after the durable goods report and as crude oil dropped. Copper futures for delivery in September lost 1.8 percent to $2.185 a pound on the Comex, the biggest loss since June 24.

In other metals news:

  • Holdings in gold-backed exchange-traded funds fell 4.4 metric tons to 1,996.2 tons on Tuesday, data compiled by Bloomberg show. That’s the lowest level since July 1.
  • Silver futures for September delivery climbed 1.6 percent to $19.995 an ounce.
  • Copper, lead and zinc declined on the London Metal Exchange, while nickel and tin rose. Aluminum was unchanged.
  • On the New York Mercantile Exchange, platinum and palladium gained.
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