Gold Breaks $1,700 Support as Wall Street Keeps Climbing

By Barani Krishnan

Investing.com — The risk rally on Wall Street keeps climbing, and gold’s safe-haven edge keeps crumbling, taking the yellow metal below the key $1,700 perch on Wednesday for the first time in a month.

U.S. gold for August delivery settled down $29.20, or 1.7%, at $1,704.80 per ounce on New York’s Comex. The benchmark gold futures contract earlier fell to $1,690.45. That was the first foray below $1,700 for the contract since a May 7 low of $1,683.90.

Spot gold, which tracks real-time trades in bullion, slid by $29.98, or 1.7%, to $1,697.61 by 3:45 PM ET (19:45 GMT).

“Gold is getting punished as global equities continue to rally as reopening momentum continues” from the coronavirus pandemic, said Ed Moya, analyst at New York’s OANDA.

“Gold will remain supported by the stimulus trade, but this round of weakness could continue a little longer as global economic recovery seems it will be much faster than anyone expected."

Stocks on Wall Street rallied Wednesday on signs the worst of the Covid-19 hit to the economy may be over following better-than-feared labor market and services data. Both the Dow and S&P 500 extended three-month highs hit on Tuesday after data showing private U.S. payrolls shed just 2.76 million jobs in May, confounding economists' expectations for a drop of 9 million.

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