By Barani Krishnan
Investing.com - It’s payout time in gold. Profit-takers were cashing in Wednesday the fruits of a three-day rally in the yellow metal. The pullback came even as brokers reported more long interest from those chasing safe-havens amid the impeachment inquiry into President Trump and other global troubles.
U.S. gold futures for December delivery settled down $27.90, or 1.8%, at $1,512.30 per ounce on the Comex division of the New York Mercantile Exchange. That was the largest one-day slide in gold in three weeks. It came after futures had hit more than two-week highs on Tuesday after a three-day rally that raked in nearly 2% for gold longs.
Spot gold, reflective of trades in bullion, was down $29.36, or 1.9%, at $1,502.88 by 2:47 PM ET (18:47 GMT).
Profit-taking aside, gold was weakened on Wednesday by President Trump’s remarks that a trade deal with China might happen sooner than thought.
Worries about the stability of the Trump administration amid the impeachment process against the president, along with heightened U.S. tensions with China and Iran, drove gold to more than two-week highs on Tuesday. Futures had then peaked above $1,543 while bullion rose over the $1,535 mark.
Traders said those bullish drivers were still present in Wednesday’s session, only the liquidation for profit was greater.
Gold lost some of its shine too as the U.S. Dollar Index hit two-week highs after Congress began its impeachment action against Trump on accusations that he pressured Ukraine, a foreign country, to launch a probe that could hamper his Democrat rival Joe Biden in 2020 presidential elections.
“The pullback in gold could be short lived as additional worries about impeachment politics add to new Brexit headlines and the protracted U.S. trade war with China,” said George Gero, precious metals analyst and managing director at RBC Wealth Management in New York.
“Investors lack clarity and see uncertainty everywhere, so they may continue to view gold in a range of $1,500 to $1,550, and eventually take it to the $1,600 area as political headlines heat up and global economics pull back.”
Trump struck a combative tone against China in his address to the U.N. assembly on Tuesday, accusing it stealing U.S. intellectual property and trade secrets. The president appeared to soften his stance against Beijing on Wednesday, signaling hope for a quicker trade deal between the two countries.
Against Iran, Trump had cited the Islamic Republic’s “blood lust” and said sanctions on its oil will be tightened unless it changed its ways. The U.S. has accused Iran of carrying out the historic Sept 14 attack on Saudi Arabia’s oil facilities. Tehran has denied the charge.