Gold retreats toward US$4,000 before COMEX futures recover

Gold prices retreated alongside a stronger dollar on Oct. 27 before December futures on COMEX recovered to US$4,075.70 an ounce at 8:01 p.m. EDT. The earlier spot reading was US$4,000.52 an ounce, down 0.4 per cent at 6:42 a.m. EDT, Reuters reported.

The two readings capture different parts of the trading day: the morning retreat reported and the evening futures quote on CME's Globex platform. The latter was an intraday reading, rather than a closing price, and does not establish that the earlier decline held.

The next scheduled policy event is the conclusion of the Federal Reserve's Oct. 27 and 28 meeting, according to its official calendar. Reuters attributed the morning pressure to the dollar's strength and concerns about restrictive monetary policy, rather than reporting a new rate decision.

For gold producers, the immediate exposure is the price received for output, alongside operating costs and production volumes. Newmont Corporation NYSENEM ASXNEM reported 1.3 million attributable gold ounces in the third quarter and US$1.9 billion of free cash flow in its Oct. 22 results.

Read more: Gold trades above US$4,000 after eight-week speculative retreat

Fed Meeting Concludes On Oct. 28

"Gold remains under pressure from a stronger US dollar and elevated Treasury yields, as persistent inflation concerns, driven by high oil prices, reinforce expectations that the Federal Reserve will maintain a restrictive monetary policy stance," ActivTrades director and chief executive Ricardo Evangelista told Reuters.

The Fed's calendar puts the next scheduled meeting after October on Dec. 8 and 9. Evangelista's explanation describes the pressures on bullion, rather than a commitment by policymakers to raise borrowing costs.

Higher interest rates raise the opportunity cost of holding gold, which pays no interest. A stronger dollar also makes dollar-priced bullion more expensive for buyers using other currencies, the Reuters report noted.

Newmont Keeps Production Outlook At 5.3 Million Ounces

Newmont reported third-quarter gold by-product all-in sustaining costs of US$1,454 an ounce in its Oct. 22 release. It also improved its full-year outlook for that measure to US$1,520 an ounce, while keeping attributable gold production guidance at 5.3 million ounces.

Those cost figures are company operating measures, rather than the price of bullion or a forecast of share performance. Newmont's release identifies all-in sustaining costs and free cash flow as non-GAAP measures.

Newmont's Oct. 22 release reported US$8.8 billion of cash at the end of the third quarter. Its net cash position was US$3.2 billion, giving a balance-sheet measure alongside the operating-cost outlook.

Agnico Eagle Mines Limited TSEAEM NYSEAEM has a nearer reporting test. Its Sept. 28 notice schedules third-quarter results after trading on Oct. 28 and a management call at 11 a.m. EDT on Oct. 29.

For the wider gold market, the next scheduled macro catalyst is the Fed meeting's conclusion on Oct. 28, when policymakers' decision will provide the next official signal on US interest rates.