Gold futures moved higher on Tuesday, giving up early losses, to trade back above $1,700 an ounce for the first time in about a month, buoyed by a retreat in the U.S. dollar and Treasury yields.
Investors also awaited October U.S. consumer price inflation data due Thursday, which will likely help guide the Federal Reserve’s next decision on monetary policy.
Price action
-
Gold futures for December delivery
GCZ22,
+2.30%
climbed $34.50, or 2.1%, to trade at $1,715 per ounce on Comex. Prices for a most-active contract haven’t settled above $1,700 since Oct. 7, FactSet data show. -
December silver
SIZ22,
+3.59%
was up 67.6 cents, or 3.2%, at $21.595 per ounce. -
December palladium
PAZ22,
+1.37%
added $18, or 1%, to $1,915.50 per ounce, while January platinum
PLF23,
+2.40%
rose $20.70, or 2.1%, to $1,010.10 per ounce. -
Copper for January
HGZ22,
+2.59%
delivery rose 8.7 cents, or 2.4% to $3.69 per pound.
What’s happening
Gold and silver futures headed higher on Tuesday, shaking off early declines, as the U.S. dollar retreated and Treasury yields weakened.
The ICE U.S. Dollar index
DXY,
was down 0.5% at 109.569 as U.S. voters headed to the polls to vote in Tuesday’s midterm elections, while the 10-year Treasury note yield
TMUBMUSD10Y,
fell nearly 7 points to 4.141%.
See: What midterm election results mean for the stock-market bounce, according to Morgan Stanley’s Wilson
Weakness in the dollar makes commodities priced in the unit less expensive to users of other currencies. Meanwhile, lower yields lower the opportunity cost of holding nonyielding gold against government bonds.
Chintan Karnani, director of research at Insignia Consultants in New Delhi, attributed the rise in gold prices to weakness in the dollar, as well as “technical buying” as gold managed to trade above its 50-day moving average. The 50-day moving average for December gold stands at $1,680.99, according to FactSet data.
Gold also saw short covering as prices broke past $1,700, Karnani told MarketWatch.
December gold now “faces resistance” at the 100-day moving average, he said. FactSet pegged the 100-day moving average at $1,731.16.
A closely watched report on inflation in October is due out on Thursday, with economists expecting the consumer-price index to show prices increased by 7.9% on a year-over-year basis.
