Gold prices climbed on Monday, with the yellow metal scoring back-to-back gains after a lengthy losing streak, even as 10-year Treasury yields looked set to log more multi-year highs.
Price action
-
Gold futures for December delivery
GC00,
+0.29% GCZ23,
+0.29%
gained $6.50, or 0.3%, to settle at $1,923 per ounce on Comex. -
Silver futures for September
SI00,
+0.47% SIU23,
+0.47%
gained 61 cents, or 2.7%, to $23.34 per ounce. -
October platinum
PL00,
+1.02% PLV23,
+1.02%
fell by $1.50, or 0.2%, to $913.50 per ounce, while palladium for September
PA00,
+1.28% PAU23,
+1.28%
delivery lost $20.90, or 1.7%, to $1,239.10 per ounce. -
September copper
HGU23,
+1.13%
gained a cent, or 0.3%, to $3.72 per pound.
Market drivers
Gold has been “suffering the pressures caused by a strong U.S. dollar, as inflation remains sticky and the economy demonstrates a resilience that few had predicted,” Ricardo Evangelista, senior analyst at ActivTrades, wrote in a commentary emailed Monday.
Against this background, U.S. interest rates could remain elevated for a prolonged period, he said, and this scenario “would create scope for the continuation of the dominance of the U.S. dollar in global markets, with gold prices likely to suffer further losses.”
This is one of the reasons traders will be paying close attention to what happens at the Jackson Hole symposium later this week, bringing together economic policymakers worldwide,” said Evangelista. The event may “help clarify the likely path for the leading central banks’ monetary policy, providing more direction to the foreign exchange market and helping to define gold’s price action in the short-to-medium term.”
For now, investors absorbed a flurry of news to start the week, including a smaller-than-expected interest-rate cut by China’s central bank.
The People’s Bank of China lowered its one-year loan prime rate by 10 basis points to 3.45%, while the five-year LPR was held at 4.2%. The U.S. dollar steadied following the announcement, while Treasury yields continued to march higher.
However, gold strengthened in spite of the rise in yields, a sign that the yellow metal is recouping some of its losses following a punishing four-week losing streak.
The ICE U.S. Dollar Index
DXY,
a gauge of the buck’s strength against a basket of rivals, was down by nearly 0.1% at 103.29, while the yield on the 10-year Treasury note
BX:TMUBMUSD10Y
increased by 9 basis points to 4.338%.
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