A softer dollar and falling Treasury yields helped boost the price of gold to its highest level in nearly two weeks on Wednesday as the yellow metal built on gains from the prior session driven by expectations for smaller interest-rate hikes by the Federal Reserve.
Price action
-
Gold futures for December
GCZ22,
+0.66%
delivery rose $16.20, or 1%, to $1,688 per ounce on Comex. -
December silver futures
SIZ22,
+0.50%
added 23 cents, or 1.2%, to $19.58 an ounce. -
December palladium
PAZ22,
+1.86%
gained $21.70, or 1.1%, to $1,940.50 per ounce, while January platinum
PLF23,
+2.25%
fell $19.50, or 2.1%, to $939 per ounce. -
Copper futures
HGZ22,
+2.90%
for December gained 6 cents, or 1.9%, to $3.46 per pound.
What’s happening
Precious metals prices are seeing a boost as the dollar and yields retreat as investors adjust their expectations to factor in a slower pace of interest-rate hikes following the Fed’s upcoming November policy meeting.
The ICE U.S. Dollar Index
DXY,
a gauge of the dollar’s strength against a basket of rivals, retreated 0.7% to 110.15, while the yield on the 10-year Treasury note
TMUBMUSD10Y,
was off 5.3 basis points at 4.054%, according to FactSet data.
Gold’s latest rebound may have more room to run — in the near term, at least — if “peak hawkishness” truly has passed, said Tom Essaye, founder of the Sevens Report newsletter.
“Bottom line, the bounce in gold futures can last as long as this current period of hope for peak-hawkishness does, which will be characterized by an easing dollar and retreating yields; however, the long-term trends continue to favor the gold bears,” Essaye said.
