(Kitco News) - Gold futures were steady Tuesday with light year-end squaring of positions but traders not rushing to establish new ones.
As of 1:30 p.m. EST, Comex February gold was 10 cents softer at $1,068.20 an ounce. March silver was up 5.6 cents to $13.94.
February gold traded in a narrow range of $1,066.70 to $1,074.60 an ounce, holding within Monday’s trading band, referred to as an “inside day” on a daily charts and seen as a sign of near-term indecision. The range for the week so far is Monday’s narrow trading band of $1,065.70 to $1,076.50.
Activity remains light even though London markets reopened after a long Christmas weekend, with limited interest on either side of the market.
“There’s year-end squaring up, but it feels like most of that has already happened,” said Frank Lesh, broker and futures analyst with FuturePath Trading. “We’re just consolidating at the lower end of our trading range and watching the dollar.”
Gold often moves inversely to the U.S. currency. The dollar is stronger, which is probably thwarting any rally attempt, Lesh suggested. The March dollar index was up 0.355 to 98.305.
“I don’t see a lot of activity or life in gold heading into the end of the year,” said Bob Haberkorn, senior commodities broker with RJO Futures.
The Federal Open Market Committee’s language after a mid-December rate hike was construed as dovish, Haberkorn said. Nevertheless, traders expect a few more hikes next year, which is holding back the yellow metal, he continued.
“It’s hard to sustain a rally right now,” Haberkorn said.
U.S. economic data has been mixed lately, he added. After weak housing data last week, the market got a strong report on consumer confidence Tuesday, he pointed out. The Conference Board reported that its index for consumer confidence climbed to 96.5 from 92.6 in November.
The only two remaining reports this week are pending home sales on Wednesday and initial jobless claims Thursday.
“Volume will dwindle towards year end and there's not much to read into any move whilst we stay within $1,050-$1,100 range,” said Triland Metals. “All eyes are on inflation in 2016 and the pace of interest-rate tightening.”
Lesh put chart support for February gold around $1,059, then the roughly $1,046 area where the market put in a pair of lows this month. He listed chart resistance around $1,074 and $1,081.
By Allen Sykora of Kitco News; asykora@kitco.com
