Gold prices inched higher on Wednesday but remained stuck around the $1,730 level as investors awaited a key reading on inflationary pressures in June. The yellow metal had settled higher for a second session on Tuesday.
Price action
-
Gold futures
GC00,
+0.12%
for August delivery climbed $4.10, or 0.2%, to $1,728. -
Silver futures
SI00,
-0.15%
for September delivery declined by seven cents, or 0.4%, to $18.89 per ounce. -
Platinum futures
PL00,
-0.25%
for October delivery inched lower, losing $2.30, or 0.3%, to $825 per ounce. -
Palladium futures
PA00,
-1.49%
for September delivery fell $44, or 2.2%, to $1,971. -
Copper futures
HG00,
+0.02%
for September delivery fell 2 cents, or 0.5%, to $3.27 per pound.
Analyst reaction
Wednesday’s inflation number could have a major impact on the precious-metals market, since a hotter-than-expected headline number could pressure the Federal Reserve to hike interest rates more quickly.
This, in turn, could drag both the dollar and Treasury yields higher. Since gold hit its 2022 peak above $2,000 per ounce in March, the strong dollar and higher Treasury yields have lured investors away from gold and into other “safe haven” assets that offer a yield.
“Another bout of US Dollar strength could well see $1675.00 fail, setting up another capitulation trade,” said Jeffrey Halley, senior market analyst for Asia-Pacific at Oanda.
The ICE U.S. Dollar Index
DXY,
a gauge of the buck’s strength against a basket of rivals, was modestly lower on Wednesday, while the Treasury yield curve continued to invert as short-term yields climbed while longer-duration yields fell. The spread between the two-year
TMUBMUSD02Y,
and 10-year Treasury
TY00,
stood at negative 8.4 basis points.
