Gold on Pace for Record Losing Run as War Hurts Longtime Haven

An employee holds one kilogram gold bullions at the YLG Bullion International Co. headquarters in Bangkok, Thailand, on Friday, Dec. 22, 2023. Gold headed for a weekly gain after US price data came in cooler than forecast, reinforcing expectations for multiple interest rate cuts by the Federal Reserve next year. Photo by Chalinee Thirasupa /BloombergArticle content(Bloomberg) — Gold was headed for a record 10th successive daily loss as concerns deepened over the war in the Middle East and its impact on inflation and global growth.Sign In or Create an AccountEmail AddressContinueor View more offersArticle contentBullion fell as much as 2.3% in another volatile session marked by the metal’s inverse relationship with oil.

President Donald Trump’s postponement of US attacks on Iran’s power network offered brief respite from gold’s dramatic wartime decline, before an Iranian official ruled out talks and the Wall Street Journal reported that US partners in the Persian Gulf could join the fight.Article contentWe apologize, but this video has failed to load.Try refreshing your browser, ortap here to see other videos from our team.Article contentArticle contentHigh energy prices resulting from the conflict have raised inflationary risks and prompted investors to ditch their relatively liquid and profitable positions in gold for other assets. The precious metal dropped nearly 2% in the previous session for its ninth straight daily decline, and had fallen nearly 17% from the start of the war to Monday’s close. Oil resumed gains on Tuesday.Article contentTop StoriesGet the latest headlines, breaking news and columns.There was an error, please provide a valid email address.Sign UpBy signing up you consent to receive the above newsletter from Postmedia Network Inc.Thanks for signing up!A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againInterested in more newsletters? Browse here.Article contentDespite the five-day pause announced by Trump, the outcome of any negotiations and future passage of ships through the Strait of Hormuz remain uncertain. Even existing damage to energy infrastructure will take time to rebuild. That means the threat of inflation continues to weigh on gold, as well as the expectation of rate hikes by the US Federal Reserve and other central banks — a headwind for non-yielding precious metals.Article content“Gold’s price correction has seen a steeper-than-usual underperformance,” said Suki Cooper, global head of commodities research at Standard Chartered Plc, adding that it is “not unusual for gold to endure downside pressure for four to six weeks following a period of extreme distress, as gold proves to be a liquid asset in times of need.”Article contentArticle contentA similar dynamic followed the Russian invasion of Ukraine in early 2022, when an initial spike in the safe-haven commodity was followed by a months-long decline, as an energy price shock rippled through markets and added to inflationary pressures.Article content“What you tend to see in a big crisis like this is investors selling heavily positioned, well-performing assets in order to fund margin calls for underperforming assets — equities, bonds, whatever,” said Peter Kinsella, global head of forex strategy at Union Bancaire Privee UBP SA.Article contentGold performed in a similar manner in 2022 and during the 2008 global financial crisis, he said. “Short-term shifts in pricing are all about positioning,” he said, adding that long-term drivers hadn’t changed.Article contentThough bullion has declined over the last few weeks, it had previously been on a prolonged rally underpinned by factors including geopolitical and trade tensions and elevated purchases by central banks. Some countries that have been accumulating bullion are energy importers, so a steeper oil and gas bill resulting from the war means fewer dollars retained to be recycled into gold.Trending Saudis and UAE Take Steps Toward Joining Iran War, WSJ Reports PMN Business 'Bleeding businesses': Number of active companies that depend on U.S. is dropping in Canada Economy Garry Marr: Why it could be the right time to walk away from your real estate Personal Finance Canada not tracking foreign students after visas lapse, auditor general says Economy Subscriber only. Hey Canadians, want to build a pipeline? Your pension might just help you do it Subscriber only Investor Article contentOn a technical reading, gold is losing upward momentum, forming what some traders call a bearish pattern with lower intraday highs and lows. However, it held above the 200-day moving average, which “provides some near-term assurance that longer-term technical support remains intact,” Robert Gottlieb, an independent market commentator and former precious metal trader at JPMorgan Chase & Co., wrote in a LinkedIn post.Article contentSpot gold fell 1.5% to $4,342.80 an ounce at 1:21 p.m. in Singapore. Silver slid 3.5% to $66.68, while platinum and palladium also declined.

The Bloomberg Dollar Spot Index, a gauge of the US currency, rose 0.3% after ending the previous session 0.4% lower.Article content—With assistance from Jack Ryan.Article contentShare this article in your social networkCommentsYou must be logged in to join the discussion or read more comments.Create an AccountSign in Join the Conversation Postmedia is committed to maintaining a lively but civil forum for discussion. Please keep comments relevant and respectful. Comments may take up to an hour to appear on the site. You will receive an email if there is a reply to your comment, an update to a thread you follow or if a user you follow comments. Visit our Community Guidelines for more information. Saudis and UAE Take Steps Toward Joining Iran War, WSJ Reports PMN Business 'Bleeding businesses': Number of active companies that depend on U.S. is dropping in Canada Economy Garry Marr: Why it could be the right time to walk away from your real estate Personal Finance Canada not tracking foreign students after visas lapse, auditor general says Economy Subscriber only. Hey Canadians, want to build a pipeline? Your pension might just help you do it Subscriber only Investor