Gold, silver climb as dollar falls to 2-week low

Gold and silver prices slipped on Wednesday as U.S. Treasury yields edged higher, with the yield on the 10-year note nearing 4%.

Price action
  • Gold for December
    GCZ22,
    -0.56%

    delivery shed $9.30, or 0.6%, to $1,676.30 per ounce on Comex.

  • Silver for December
    SIZ22,
    -1.65%

    delivery declined 31 cents, or 1.6%, to $19.19 per ounce.

  • December palladium futures
    PAZ22,
    -1.02%

    for December delivery climbed $4.10, or 0.2%, to $2,154 per ounce, while platinum futures
    PLF23,
    -1.31%

    for January delivery fell $7.10, or 0.8%, to $892 per ounce.

  • Copper for December delivery
    HGZ22,
    -0.81%

    fell 3 cents, or 0.8%, to $3.44 per pound.

What’s happening

Ole Hansen, chief commodity strategist at Saxobank, said in a note Wednesday that fluctuations in Treasury yields and the value of the dollar have taken gold and other commodities on a “rollercoaster ride” in recent weeks.

“Commodity markets continue to attract a great deal of directional inspiration from the price action across financial markets,” he said.

The yield on the 10-year Treasury note
TMUBMUSD10Y,
3.958%

rose 2.2 basis points to 3.958% on Wednesday. The ICE U.S. Dollar Index
DXY,
+0.06%
,
a gauge of the dollar’s strength against a basket of rival currencies, was flat at 113.23.

However, there’s still reason to be long gold, Hansen said, citing the risk of a Federal Reserve policy “mistake” that could provoke a reversal in stocks, bonds and the dollar.

“Looking ahead we see no reason to change our long-term bullish view on gold with support potentially coming from the risk of a policy mistake sending US economic growth, the dollar and bond yields lower,” he said.

By admin

Leave a Reply

Your email address will not be published. Required fields are marked *