Why Did Gold and Silver Pull Back on November 3?


Nov. 4 2016, Published 5:45 a.m. ET

Gold and silver pared gains

After rising for two consecutive trading days, gold and silver pulled back on November 3. At 2:50 PM EST on November 3, the COMEX gold futures contract for December delivery was trading at $1,303.15 per ounce—a fall of ~0.39%. The COMEX silver contract for December delivery fell ~1.9% to $18.34 per ounce.

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Weaker dollar and election uncertainty

Weakness in the US dollar along with the uncertainty about the outcome of the US presidential election supported gold prices. The weaker dollar supports the prices of dollar-denominated commodities such as gold, copper, and silver. Gold and silver started the day on a weaker note, but gained strength as the day progressed due to a fall in the US dollar. Read Copper Is Stable, Gold and Silver Are Weaker Early on November 3 to learn how metals traded in the early hours on November 3.

Even though gold was stronger since November 1, it started to pare gains since the release of the FOMC statement at 2:00 PM EST on November 2. The Fed left the interest rate unchanged in its two-day November meeting. It gave signals on an interest rate hike in December as the economy improved and inflation moves up. The market is looking forward to the non-farm payroll data and unemployment rate data scheduled to release at 8:30 AM EST on November 4.

At 3:00 PM EST on November 3, precious metal producers Barrick Gold (ABX), Newmont Mining (NEM), Silver Wheaton (SLW), and Royal Gold (RGLD) rose ~0.6%, ~0.91%, ~1.4%, and ~8.4%, respectively. The SPDR Gold Trust ETF (GLD) rose ~0.35%.

In the next part, we’ll discuss how companies in the energy sector performed on November 3.


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