Gold futures settled higher Tuesday, posting a slight gain as the U.S. dollar softened and gains for equity markets in the U.S. faded in afternoon action.
Silver futures for March delivery shed 32.2 cents, or 1.2%, at $26.217 an ounce, slashing in half a 2.4% rise in the previous session.
The dollar was off 0.3%, as measured by the ICE U.S. Dollar IndexDXY, a measure of the buck against a half-dozen currencies. A weaker dollar, which can make commodities priced in the currency more attractive to overseas buyers, combined with a retreat in stocks from Tuesdayâ€™s earlier highs, to buttress goldâ€™s price on the day.
Indeed, the Dow Jones Industrial Average DJIA, -0.06%, the S&P 500 index SPX, -0.05% and the Nasdaq Composite Index COMP, -0.25% were trading in negative territory on Tuesday after trading to intraday records earlier in the session.
Equity markets tilted lower on Tuesday as Senate Majority LeaderÂ Mitch McConnellÂ blocked Senator Chuck Shumerâ€™s attempt to push through a bill in the Senate that would increase direct payments in the year-end coronavirus relief packagel to $2,000 by unanimous vote. On Monday, the House passed a similar bill to raise direct payments to Americans as a part of the fiscal spending package signed by President Donald Trump over the weekend.
Some key gold buyers are expecting gold to be buoyant in 2021.
â€œThis could be purely because they expect the risk-on trade to cool off as we start the new year,â€ wrote Naeem Aslam chief market analyst at AvaTrade in a daily note.
The strategist said that goldÂ holdings in the worldâ€™s largestÂ goldÂ backed exchange-traded fund, SPDRÂ GoldÂ Shares GLD, +0.36%, also confirms an increase in holdings, rising to 1,169.86 metric tons from 1,167.53 metric tons.
In other metals trade, March copper HGH21, -0.49% lost 1.55 cent, or 0.4%, to settle at $3.5555 a pound, following a gain of 0.2% on Monday.
April platinum PLF21, +1.43%, the new most active contract, picked up $13.50, or 1.3%, to end at $1,062.60 an ounce, while March palladium PAH21, -0.42% gave up $7.50, or 0.3%, to settle at $2,344.30 an ounce.