Gold prices settled Tuesday at their lowest in three weeks, with a stronger dollar putting pressure on precious-metals prices, as traders awaited the latest batch of U.S. inflation data due out Wednesday.
Price action
-
Gold for December delivery
GC00,
-0.56% GCZ23,
-0.56%
fell by $12.10, or 0.6%, to settle at $1,935.10 per ounce on Comex. That was the lowest most-active contract finish since Aug. 22, according to Dow Jones Market Data. -
December silver
SIZ23,
-0.01%
climbed by 2 cents, or nearly 0.1%, to $23.40 per ounce. -
Platinum for October delivery
PLV23,
+1.37%
added $10.50, or 1.2%, to $912.80 per ounce, while December palladium
PAZ23,
+2.20%
tacked on $26.10, or 2.1%, to $1,245.30 per ounce. -
December copper
HGZ23,
-0.43%
shed a penny, or 0.4%, to $3.79 per pound.
Market drivers
Gold and silver prices have softened since the beginning of September as the U.S. dollar has continued to climb, heaping pressure on commodity prices. Rising bond yields and the prospect of another interest-rate hike from the Federal Reserve in November have also contributed to precious metals prices’ woes.
The strength of the dollar, “a headwind for gold, has been persistent with only a few minor pullbacks along the way,” Michael Armbruster, managing partner at Altavest, told MarketWatch. “More important, long-term Treasury yields continue to trend higher.”
“We like gold in the longer run, but these two headwinds are keeping gold in check for the time being,” he said.
Strength in the U.S. dollar on Tuesday once again coincided with weaker gold prices, as U.S. currency rebounded from a slight pullback on Monday.
Since logging its lowest end-of-day level of the year on July 13, the ICE U.S. Dollar Index
DXY
has climbed more than 4%, according to FactSet data. The dollar index, which measures the buck’s strength against a basket of its main rivals with a heavy weighting toward the euro, was up 0.2% at 104.72 in Tuesday trade.
Wednesday’s U.S. CPI report is expected to show that, in August, consumer prices rising by 0.6%. The data are expected to make a splash in precious-metals markets, analysts said. The numbers are due out at 8:30 a.m. Eastern time.
See: Inflation is set for a big increase, CPI to show. Here’s why.
The reading holds significant importance ahead of the Fed’s policy meeting in September and may provide additional insights into the inflation scenario in the United States, “which could significantly impact investor expectations regarding the U.S. dollar and, consequently, gold trading,” said Rania Gule, market analyst at XS.com.
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