Gold prices are lower on Tuesday, a day after the precious metal slid more than 2%, driven least partly driven by a powerful U.S. dollar rally and recent gains in equities.
Gold for December delivery GCZ19, -0.07% on Comex fell $3.50, or 0.2%, to reach $1,469.40 an ounce, after retreating 2.2% on Monday and declining 3.7% in September.
The yellow metal, however, posted a 3.4% gain in the second quarter of 2019.
Recent struggles for bullion have come as the U.S. dollar has strengthened against major currency rivals and as U.S. stocks have edged up. The ICE U.S. Dollar Index DXY, +0.18%, a measure of the currency against a basket of six major rivals, is at its highest level since April of 2017 after notching a 3.4% gain in the second quarter, marking its strongest quarterly climb since a 5% rally in the second quarter of 2018.
Compared against a year ago, the DXY is up around 4.4%, while the euro EURUSD, -0.0183% is nursing a 6.1% year-over-year decline. A strong dollar can be a headwind for assets priced in the currency, including precious metals.
The stronger buck has threatened to upend a strong upward trend for gold, with Monday’s skid pushing gold firmly below its 50-day moving average at $1,500.83 an ounce, according to FactSet data, for the fist time since late May.
“Probably a lot of dismal retail traders today who took the advice of some of the who’s who in Financial world to go all-in on gold,” wrote Stephen Innes, independent market strategist in a daily research report, referring to a number of calls by high-profile Wall Street investors, including Bridgewater Associates’s Ray Dalio and Paul Tudor Jones, who have been bullish on gold, in an environment of ultralow yielding government bonds.
“They were likely looking for that ultimate home run trade of the year. But in one fell swoop below 1480, it felt like a whole pile of leveraged gold paper evaporated in a wave of margin calls,” Innes wrote.
Meanwhile, December silver SIZ19, +0.84% was up 16 cents, or 0.9%, to reach $17.150, after a 3.7% tumble on Monday, which pushed the contract to its first finish below $17 since early August. It lost more than 7% in September, but gained over 10% for the quarter.