Gold Price Dangerously Close to 3-Month Lows as Dow, S&P 500, Nasdaq Touch All-Time Highs

The gold price declined on Monday and was dangerously close to sliding back towards three-month lows against the dollar.
Gold bullion price
Gold prices declined sharply on Monday as risk-on investors piled into equities. | Image: shutterstock.com
  • Gold sinks to a low near $1,460/oz.
  • Bullion suffered its third consecutive drop and is now on the brink of re-testing three-month lows.
  • S&P 500, Dow and Nasdaq surge to all-time highs.

The price of gold suffered another selloff Monday and headed for its third consecutive loss, as U.S. stocks touched new all-time highs on China trade-deal optimism.

Gold Price Suffers Another Setback

Gold for February delivery fell $9.80, or 0.6%, to $1,460.70 a troy ounce on the Comex division of the New York Mercantile Exchange. That’s the lowest in almost two weeks.

February gold futures
Gold futures are one more down session away from re-testing multi-month lows. | Chart: barchart.com

Bullion is on the precipice of re-testing three-month lows as demand for safe havens continues to fade. Since peaking at more than six-year highs in early September, the yellow metal has plunged by more than $200 an ounce.

The selloff in gold had a gravitational pull on silver, with the grey metal falling 14 cents, or 0.8%, to $17.07 an ounce.

Equities Surge on Trade Hopes

Wall Street carved out new all-time highs Monday over nothing more than “positive U.S.-China trade vibes.”

Investors are optimistic that a trade deal is on the horizon after President Trump told Fox News Friday that both sides were “potentially very close” on breaking the impasse. Meanwhile, Chinese President Xi Jinping said Beijing is keen on finalizing an agreement based on “mutual respect and equality.”

It’s apparent by the market’s reaction Monday that a U.S.-China trade deal has been over-hyped. For starters, negotiators are only optimistic about a ‘phase one’ deal, which amounts to a freeze on U.S. tariffs in exchange for more agricultural shipments to China. But the Chinese haven’t confirmed how much U.S. agricultural goods they would like to buy. The Trump administration has also balked at the possibility of scaling back tariffs without major concessions coming the other way.

Several outstanding issues block the conclusion of a more comprehensive trade deal. Chief among them include Chinese industrial policy and intellectual property laws.

In a Sunday report, Reuters threw cold water on the possibility of a more substantive ‘phase two’ deal anytime soon. The news organization reported last week that phase one was unlikely to be completed by the end of 2019.

Josiah Wilmoth edited this article for CCN.com. If you see a breach of our Code of Ethics or find a factual, spelling, or grammar error, please contact us.

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Sam Bourgi

Sam Bourgi

Financial Editor of CCN.com, Sam Bourgi has spent the past decade focused on economics, markets, and cryptocurrencies. His work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE, Yahoo Finance, and Forbes. Sam is based in Ontario, Canada and can be contacted at sam.bourgi@ccn.com or at LinkedIn. Visit his Muck Rack profile here. Sam Bourgi is a Trusted Journalist.

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