Gold futures were climbing tepidly on Tuesday as the U.S. dollar softened, but gains for the precious metal are muted amid a year-end rise in assets perceived as risky like stocks.
Gold for February delivery
Silver futures for March delivery shed 16 cents, or 0.6%, at $26.38 an ounce, following a 2.4% rise in the previous session.
Jim Wyckoff, senior analyst at Kitco.com said in a Tuesday research note that “the safe-haven gold and silver bulls are being constrained by rallying U.S. and global equity markets that see the U.S. stock indexes at record highs.”
Indeed, the Dow Jones Industrial Average
the S&P 500 index
and the Nasdaq Composite Index
were heading for a second day of records as stocks rallied to end a coronavirus-stricken year.
Meanwhile, the dollar was off 0.4%, as measured by the ICE U.S. Dollar Index
a measure of the buck against a half-dozen currencies.
Some key gold buyers, however, are expecting the metal to rise in 2021.
“This could be purely because they expect the risk-on trade to cool off as we start the new year,” wrote Naeem Aslamm chief market analyst at AvaTrade in a daily note.
The strategist said that gold holdings in the world’s largest gold backed exchange-traded fund, SPDR Gold Shares
also confirms an increase in holdings, rising to 1,169.86 metric tons from 1,167.53 metric tons.