Gold prices slightly firmer after seeing 1-month lows

Gold prices were slightly firmer Wednesday, after settling at their lowest levels in more than a month on Tuesday, as slipping Treasury yields and a firm U.S. dollar helped ease some of the pressure on the yellow metal.

Price action

  • Gold futures for December delivery

    were up by $1.90, or 0.1%, to $1,937 per ounce on Comex.

  • Silver futures for September

    delivery rose by 10 cents, or 0.5%, to $22.76 per ounce.

  • Palladium futures for September delivery

    fell by $16.60, or 1.3%, to $1,222 per ounce, while platinum futures for October delivery

    declined by $3.60, or 0.4%, to $888.60 per ounce.

  • Copper futures for September delivery

    were marginally lower at $3.67 per pound.

Market drivers

Gold prices have been sliding for weeks as global bond yields have climbed and the U.S. dollar has recovered some of its earlier losses the euro
and the Japanese yen

Rising crude-oil prices and stronger-than-expected U.S. economic growth are stoking fears that inflation could re-accelerate, potentially forcing the Federal Reserve and other central banks to continue raising interest rates which could weigh on gold prices.

“In the commodity arena, gold has been drifting lower this month, stuck below a short-term downtrend line as the forceful rally in real yields and the dollar’s revival have taken the shine out of the precious metal,” said Marios Hadjikyriacos, senior investment analyst at XM, in emailed commentary.

“One could argue that gold being just 8.5% away from record highs despite the sharp spike in real yields is encouraging in itself, but equally, it’s difficult to envision what will slingshot bullion back higher in the absence of a recession.”

The ICE U.S. Dollar Index
a gauge of the greenback’s strength against a basket of rivals, was off by 0.1% on Wednesday at 103.11. However, it has risen 3.2% over the past month. The yield on the 10-year Treasury note
fell 2.5 basis points to 4.190% after touching its highest level in about 10 months on Tuesday, according to Dow Jones Market Data. Bond yields move inversely to prices.

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