Gold futures finished lower on Tuesday, pulling back from a nearly 4% climb over the past two trading sessions, as U.S. factory orders for May came in better than expected.
Gold for August delivery GCQ3 +0.12% fell $12.30, or 1%, to settle at $1,243.40 an ounce on the Comex division of the New York Mercantile Exchange.
Gold futures post first loss in three sessions.
Prices had lost more ground after the U.S. Commerce Department reported that factory orders climbed 2.1% in May. That compared with a rise of 1.9% expected by economists surveyed by MarketWatch.
With the U.S. Independence Day holiday on Thursday and the much-anticipated jobs report due out Friday, “it is difficult to say whether gold has resumed its downward trajectory,” said Fawad Razaqzada, technical analyst at GFT Markets.
But with prices having turned lower even before reaching the $1,270/1,275 resistance area, that shows “there’s not much conviction from the buyers,” he said.
Gold on Monday climbed 2.6% after a 1% Friday gain.
A ‘torrid’ time
Prices slid 23% during the April-June period, according to FactSet data, marking the worst quarterly decline since modern trading began in the mid-1970s.
“Gold investors had a torrid time in June, but such price action isn’t unprecedented,” said Adrian Ash, head of research at BullionVault.
“We think it offers a long-term bargain, but either way history says it’s very likely to offer a strong short-term rally at least,” he said in emailed comments.
Improvement in the U.S. economy — leading to speculation of a slower pace of monetary stimulus, gains for the U.S. dollar DXY +0.06% and a sudden spike in U.S. bond yields — each played roles in gold’s recent price plunge, analysts have said.
While “we came into the year with a view that investors should maintain a benchmark weight to gold, we would now suggest trimming that position,” BlackRock’s global chief investment strategist Russ Koesterich told clients Monday in a review of its 2013 calls.
“As we’ve seen in recent weeks, with real (inflation-adjusted) interest rates rising, gold is particularly vulnerable,” he wrote, with real interest rates referring to the return on bonds minus inflation.
Barclays on Monday cut its gold-price forecast for this year to $1,393 an ounce, down from its previous outlook of $1,483 an ounce. Analysts there said additional weakness for gold prices came later in the second quarter than they had expected.
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Goldman Sachs, Deutsche Bank, Morgan Stanley and HSBC are among the other banks that have recently downgraded their 2013 price projections for the precious metal.
On Tuesday, silver closed lower along with gold. September silver SIU3 +0.58% lost 27 cents, or 1.4%, to close at $19.31 an ounce.
September copper HGU3 -0.08% closed at $3.14 a pound, down 1 cent, or 0.4%, after hitting a two-week high on Monday.
October platinum PLV3 +0.25% fell $14.70, or 1.1%, to $1,367.80 an ounce. Platinum on Monday climbed by $42.60.
September palladium PAU3 -0.37% edged up by $2.20, or 0.3%, to $688.90 an ounce. The contract on Monday rose $26.