By Gold prices slipped early on Wednesday after reaching a six-week high, buoyed by a weakening U.S. dollar and lower Treasury yields in recent sessions.
Price Action
- Gold futures for August delivery (GC00, -0.09% GCQ23, -0.09%) shed $5, or 0.3%, to $1,975 an ounce on Comex. The most-active contract settled at $1,980.80 on Tuesday, marking the highest level since June 6.
- Silver futures for September delivery (SI00, +0.11% SIU23, +0.11%) fell by 6 cents, or 0.2%, to $25.20 per ounce.
- October platinum (PLV23, -0.25%) lost $7.40, or 0.7%, to $987 per ounce, while palladium for September (PAU23, -1.10%) fell by $27, or 2.1%, to $1,289 per ounce.
- Copper futures for September (HGU23, -0.74%) declined by 3 cents, or 0.9%, to $3.80 per pound.
Market Drivers
The rally in gold took a pause on Wednesday as the U.S. dollar saw a slight increase. The ICE U.S. Dollar Index (DXY, +0.26%), which measures the dollar’s value against major currencies, rose 0.3% to 100.27.
Looking ahead, the Federal Reserve’s policy meeting next week could be a decisive moment for gold, with investors closely monitoring any changes in the Fed’s plans for further interest rate increases based on the latest batch of U.S. economic data.
“How long gold can continue to trade at such high levels remains to be seen with the reaction to next week’s Fed rate decision a key staging post for gold’s long-term durability,” said Rupert Rowling, a market analyst at Kinesis Money.
He added, “Considering that another increase is already priced in, gold may yet prove able to shrug off the latest hike. However, if there is an indication in the press conference and supporting commentary that further hikes are still likely, then gold could fall sharply.”
Meanwhile, Treasury yields moved lower early on Wednesday. The yield on the 10-year note (TMUBMUSD10Y, 3.746%), which is considered the U.S. benchmark, fell 3.9 basis points to 3.755%.
Comments