- Gold gets a modest bid from the trouble in China, as contagion fears from the debt woes of real estate developer China Evergrande prompted demand for safe havens, but gains were limited by dollar strength and concerns that the Federal Reserve could pull back its stimulus at its policy meeting this week.
- December Comex gold (XAUUSD:CUR) settled +0.7% to $1,763.80/oz. following declines in the previous three sessions and posting a 2.3% decline last week.
- ETFs: GLD, GDX, GDXJ, NUGT, SLV, SIL
- Gold-focused equities finished mixed, although Newmont (NYSE:NEM) closed -2.2% and touched a 52-week low; also, KGC -0.7%, AEM -0.4% and IAG -4.3%, but GOLD +1.6%, AUY +0.7%, KL +0.9% and EGO +0.3%.
- "People are reacting to what's happening in China, but this week's Fed meeting is also important," Bart Melek, head of commodity strategies at TD Securities, tells Reuters. "Anything suggesting a fairly earlier tapering would be out of consensus and that would mean a pretty significant correction in gold prices."
- "Whether the current price reversal in gold is a bearish rally [or] a sustained trend reversal will be known only after the FOMC meeting this week," Insignia Consultants' Chintan Karnani tells MarketWatch, expecting a December taper to be confirmed in the FOMC meeting, which is "more or less factored in by gold traders," so gold prices may rise if the Fed confirms a December taper.
- Also, December silver (XAGUSD:CUR) finished -0.6% to $22.20/oz., its lowest for the most-active contract since July 2020.
- Gold prices posted their sharpest drop in nearly six weeks last Wednesday as U.S. economic data topped expectations.