Gold futures finished lower on Tuesday, as equities attempted to bounce back from the previous session's rout and worries over global trade tensions appeared to take a breather.
Although European stocks ended lower, U.S. shares traded higher as stocks attempted to recover at least part of Monday's technology-driven bloodletting, while a leading dollar index'sDXY, -0.08% slight 0.1% gain produced a sufficient headwind for the yellow metal. The two typically move inversely.
June gold GCM8, -0.03% settled down $9.60, or 0.7%, to $1,337.30 an ounce. Gold had risen 0.7% to start the week, a move that allowed the haven precious metal to build on what was a third quarterly gain in a row to start the year, although was notably the slimmest three-month rise-up just 0.7% for the June contract and up 1.4% on a continuing basis-in seven years.
"Gold has given back some of its sharp gains from yesterday. As well as a slightly positive tone in the stock markets, the dollar has rebounded against both the euro and the yen," said Fawad Razaqzada, technical analyst at Forex.com.
Trade uncertainties are keeping a floor under the precious metals market. The Trump administration is expected this week to unveil a list of advanced-technology Chinese imports targeted for U.S. tariffs. That will follow Beijing's announced tariffs on about 130 U.S. goods, including key agricultural exports, intensifying a dispute between the world's two largest economies.
It is this underlying safety theme, including against a backdrop of greater stock-market volatility, that is likely to keep gold above $1,300 this year, Citi analysts said in a note. They see a 30% chance that gold can even clear $1,400 in 2018.
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"A combination of a dovish U.S. rate hike on March 21 [when the Federal Reserve stuck with its projected number of rate hikes for the year], global trade tensions, lower bond yields and a stronger yen all help trigger a gold rush during the reporting week to March 27," said Ole Hansen, head of commodity strategy at Saxo Bank, in a commentary, citing commitment of traders data. "Speculators bought...the most in a single week since June 2016."
Despite these upbeat factors stacked in its favor, gold has struggled to break from a slim trading range of $1,310-$1,360 since the start of the year.
"I attribute today's gold price fall as profit-taking after yet another failed attempt to break past the double top around $1354," said Chintan Karnani, chief market analyst at Insignia Consultants.
Analysts said the next important piece of data that may help influence commodity trade is a reading of private-sector employment from ADP Inc. due on Wednesday.
Meanwhile, May silver SIK8, +0.05% fell 28 cents, or 1.7%, to close at $16.392 an ounce after a 2% climb in the previous session. The contract lost about 5% for the first quarter.
Among exchange-traded products, the SPDR Gold Shares ETF GLD, -0.75% fell 0.8%. The iShares Silver Trust SLV, -1.21% shed 1.2%, while the VanEck Vectors Gold Miners ETF GDX, -1.44% gave up 1.1%.
Among other metals, May copperHGK8, -0.20% added 0.4% to settle at $3.0635 a pound. July platinum PLN8, -0.32% fell $5.20, or 0.6% to $931.30 an ounce. June palladium PAM8, -0.10% fell 30 cents, or less than 0.1% to $927.80 an ounce.