Gold futures firmed on Monday as the dollar and stocks struggled, with the precious metal looking to build on what was a third-straight quarterly gain although notably the slimmest three-month rise for the asset in seven years.
Investors returned from the long Easter weekend (although much of Europe remained on holiday) to fresh developments on the trade-war front, which helped boost demand for haven gold. China announced tariffs on about 130 U.S. goods, including a 25% penalty slapped on U.S. pork and 15% on fruit. The news means China has made good on its threat to retaliate against the Trump administration’s tariffs on Chinese steel and aluminum imports.
Against this backdrop, June gold GCM8, +0.61% added $7.80, or 0.6%, to $1,327.30 an ounce.
Gold futures fell 2.1% last week and ended around 0.3% lower for the month of March. For the quarter and year to date, they were 0.7% higher. Based on the most-active contract settlement of $1,309.30 at the end of 2017, however, gold futures were up 1.4% for the first quarter and year to date—the smallest quarterly rise since the three months ended March 2011, according to FactSet data.
The ICE U.S. Dollar Index DXY, -0.11% a measure of the greenback against a half-dozen currencies, slipped 0.1% Monday and is down over 2% year to date. Gold and the dollar often move inversely as strength or weakness in the dollar impacts gold’s appeal to investors using other currencies.
“Politics has been dominating the markets, rather than economics. The mood in the market can change with just one tweet. Trade is still the big issue as Trump focuses on China,” said Marshall Gittler, chief strategist at ACLS Global.
“The impact of the turmoil in U.S. trade policy is hard to evaluate however as the market has been distorted by end-of-quarter flows,” he said. “This may be one reason why the dollar has seemed to go up and down almost at random, without regard to risk.”
Stocks appeared headed lower amid the trade ramifications and other factors, boosting the allure of “risk-off” bullion. The Dow Jones Industrial Average and the S&P 500 index broke a streak of quarterly gains and, along with the Nasdaq, logged steep declines for March.
As for the interest-rate watch, economic data Monday features the Markit manufacturing purchasing managers index for March due at 9:45 a.m. Eastern Time, followed by the Institute for Supply Management manufacturing index for March at 10 a.m. Eastern and construction spending for February at the same time.
Data highlights for the rest of week include Friday’s March payrolls report, where some economists expect hiring will slow down.
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Meanwhile, May silver SIK8, +1.18% jumped 18 cents, or 1.2%, to $16.455 an ounce. The contract ended about 1.9% lower for the week, down 0.7% for the month to lose 5.5% for the quarter. Based on the most-active contract settlement of $17.145 at the end of December, silver lost 5.1% for the quarter and year to date.
The SPDR Gold Shares GLD, +0.05% rose 0.4%, but traded 1.5% higher for last quarter. The iShares Silver Trust SLV, +0.33% added 0.7%, after a quarterly loss of 3.8%, while the VanEck Vectors Gold Miners ETF GDX, +1.48% slipped early Monday after it was down nearly 6% for the quarter.
Among other metals, May copper HGK8, +1.21% added 1.3% to $3.065 a pound, with the contract ending around 8.7% lower for the quarter. July platinum PLN8, +0.88% rose 0.8% to $940.40 an ounce, after a quarterly loss of about 1.2%. June palladium PAM8, +0.27% rose 0.3% to $946.35 an ounce after dropping more than 10% for the quarter.