U.S. stocks on Tuesday opened slightly higher as equity benchmarks extended a multisession rise powered by hope of a more favorable tax regime and an upbeat outlook for coming corporate results. The Dow Jones Industrial Average DJIA, +0.09% opened up 32 points, or 0.1%, at 22,591, the S&P 500 index SPX, +0.12% climbed 2 points, or 0.1%, at 2,531, while the Nasdaq Composite Index COMP, +0.04% gained 9 points, or 0.1%, at 6,525. The S&P 500 and the Dow hit opening intraday records early in the session, with the Nasdaq not far behind. All three major stock gauges finished at all-time highs on Monday, as well as the small-cap oriented Russell 2000 Index RUT, -0.28% shaking off the grimness of a Sunday massacre in Las Vegas that left 59 people dead and scores more injured. In corporate news, shares of gun makers were still in focus, after Sunday’s mass shooting, with Smith & Wesson-parent American Outdoor Brands Corp. AOBC, -0.06% trading higher after strong gains on Monday. Meanwhile, shares of home builder Lennar Corp. LEN, +1.92% were climbing after better-than-expected corporate results
Gold prices logged a third decline in a row on Tuesday, pressured by record highs in U.S. stock benchmarks, as recent strength in the dollar and Treasury yields lured some investors away from the precious metal.
December gold on Comex GCZ7, +0.10% fell $1.20 , or less than 0.1%, to settle at $1,274.60 an ounce, settling at the lowest level since Aug. 8 for a second straight session.
U.S. government bond yields got a boost off increased expectations that Federal Reserve Chairwoman Janet Yellen and fellow policy makers are inclined to lift interest rates once more before the end of 2017. The 2-year Treasury yield note TMUBMUSD02Y, +0.28% the most sensitive to shifting interest-rate expectations, hit a 52-week high on Monday, but it has pulled back to trade more recently at 1.463% Tuesday.
Higher bond yields, which move inversely to prices, can make owning gold, which doesn’t offer interest, less appealing. The exchange-traded SPDR Gold Shares ETF GLD, +0.28% meanwhile, traded up 0.1%.
Mihir Kapadia, CEO of Sun Global Investments, said gold is being pressured by strength in the greenback, and a downturn in physical buying. The dollar, as measured by the U.S. ICE Dollar Index DXY, -0.03% which gauges the currency against a half-dozen rivals, was almost flat on the day but gained about 1% last week. Dollar strength tends to make buying bullion, which is priced in dollars, less attractive to investors using weaker currencies.
“With the chatter over [President Donald] Trump’s choice for Fed chair starting to dominate, gold really is all about the greenback right now,” said Adrian Ash, head of research at BullionVault.
From the 12-month peak on Sept. 8, gold has lost roughly 6.5%—and “it’s dropped at its fastest pace versus the dollar since December 2016’s sharp correction,” he said.
“The metal might rally if the dollar now drops—say, on Trump picking ‘low-rate Yellen’ over ‘rate-rise [Kevin] Warsh’ within the 2-3 week deadline the president just set himself,” said Ash. Gold’s “strongly negative correlation with the dollar” might also “crack—perhaps if the S&P SPX, +0.12% jumps on the prospect of lower for longer from the Fed.”
Meanwhile, U.S. stocks, notably the Dow Jones Industrial Average DJIA, +0.09% and the S&P 500 index, were setting more records. Much of the enthusiasm around equities has been driven by optimism that Trump’s administration will implement tax policies, including tax cuts and repatriation of money held abroad, that could boost appetite for risky assets and away from gold.
In other metals trading, December silver SIZ7, +0.10% lost less than half a cent to $16.650 an ounce, while the silver ETF, iShares Silver Trust SLV, -0.13% rose 0.3%.
December copper HGZ7, +0.78% added under a penny to $2.964 a pound. January platinum PLF8, +0.26% fell 0.1% to $915.50 an ounce and December palladium PAZ7, +0.38% rose 0.6% to $916.90 an ounce.
The Dow Jones Industrial Average saw its gains firm on Wednesday after Secretary of State Rex Tillerson addressed reports that he was on the verge of leaving President Donald Trump’s administration and referred to POTUS as a “moron.” In a news conference at around 11 a.m. Eastern on Wednesday, Tillerson, a former head of Exxon Mobil Corp. XOM, +0.04% rebutted a report from NBC News, citing multiple senior administration officials, that claimed that he thought ill of the president and considered resigning. Tillerson reaffirmed his commitment to Trump in his conference, however, he didn’t appear to outright deny the claim that he called Trump a name, saying that it was “petty nonsense” to entertain those accusations. Most recently, the Dow DJIA, +0.09% was up 0.1% at 22,662, while the S&P 500 index SPX, +0.12% was up about a point, or less than 0.1%, at 2,535, hitting an intraday record earlier. The Nasdaq Composite Index COMP, +0.04% was trading 0.1% lower at 6,522. All three benchmarks closed at all-time highs on Tuesday and have been bolstered by hope that a pro-market tax proposal will be passed in Congress.