By Myra P. Saefong and Sue Chang
Silver futures turned lower on Tuesday, surrendering what would have been a nearly two-year settlement high as a rally in U.S. equities tarnished the appeal of precious metals, including gold.
September silver SIU6, -0.30% pulled back, losing 13 cents, or 0.7%, to settle at $20.17 an ounce.
Silver had traded as high as $20.595 an ounce early Tuesday, buoyed by hedging demand and for its use as an industrial commodity. Prices for the white metal have posted gains in eight of the last nine trading sessions. Prices finished Monday at $20.304, the highest since August 2014, according to FactSet.
“Silver’s been holding strong compared to its more precious cousin on hopes of new central-bank stimulus, but gold’s sharp drop was sure to dent the grey metal too,” said Adrian Ash, head of research at BullionVault. “The two move in lockstep, going in the same direction on nearly 75% of all trading days over the last half century.”
Meanwhile, gold settled down for a fourth session in a row. August gold GCQ6, -0.26% slid $21.30, or 1.6%, to settle at $1,335.30 an ounce.
Declines for precious metals came as U.S. stocks soared to new heights on Tuesday, dulling interest in the shiny metals. The S&P 500 index SPX, +0.70% and Dow Jones Industrial Average DJIA, +0.66% both touched intrada highs after stronger-than-expected earnings from Alcoa Inc. AA, +5.42% which marked the kickoff to earnings season.
“Gold’s price action suggests that the precious metals may be due for a consolidation period or correction from their recent rally,” said Michael Armbruster, principal and co-founder at Altavest. “Silver will likely follow gold, but the strong correlation between the two metals doesn’t always match up on a day-to-day basis.”