Gold prices traded marginally higher on Tuesday as traders set their sights on inflation and labor-market data due out of the U.S. later this week.
- Gold futures for December delivery (GC00) gained 40 cents, or less than 0.1%, to $1,947 per ounce on Comex.
- Silver futures for September delivery (SI00) were marginally higher at $24.26 per ounce.
- October platinum (PL00) gained $9.50, or 1%, to $981 per ounce.
- Palladium for December delivery (PA00) fell by $5.40, or 0.4%, to $1,256.50 per ounce.
- Copper for December delivery (HG00) gained 1 cent, or 0.4%, to $3.81 per pound.
Gold prices have benefited over the past week as Treasury yields have retreated from their highest levels in more than 15 years. The 10-year note yield (BX:TMUBMUSD10Y) touched its highest level since 2007 last week, according to FactSet data, when it traded just shy of 4.37%. It was trading at 4.220% early Tuesday.
Meanwhile, the U.S. dollar is holding steady just shy of its highest levels since March. The ICE U.S. Dollar Index (DXY) was trading at 104.10 early Tuesday, FactSet data show.
Commodity Analysts Attribute Recent Strength of Yellow Metal to Federal Reserve Chairman’s Commentary
Commodity analysts have attributed the recent strength of the yellow metal to last week’s commentary from Federal Reserve Chairman, Jerome Powell. In his remarks, Powell appeared non-committal about the prospect of more interest-rate raises. This lack of clarity regarding future interest rates has made it difficult for investors to predict short-term movements in the price of gold.
According to a team at Commerzbank, given the current uncertainty surrounding interest rates, any significant fluctuations in the price of gold, whether positive or negative, appear unlikely and unjustified at this time. They believe that once investors have a clearer understanding of what’s to come, any short-term price changes in the yellow metal could be quickly reversed.
However, not everyone shares this cautious view. A top strategist at Morgan Stanley expressed optimism on Monday, stating in a note to clients that she is actively seeking opportunities to purchase the yellow metal. This suggests that there may be potential for a more positive outlook on the gold market.
Investors should pay close attention to upcoming economic data from the United States, as it could significantly influence the price of gold. On Thursday, the release of the PCE Index, which serves as the Federal Reserve’s preferred inflation gauge, will provide valuable insights. Additionally, on Friday, the Department of Labor will publish its August jobs report, offering further information that could impact the yellow metal’s price.
In conclusion, while some analysts believe that major price fluctuations in gold are unlikely and unjustified for now, others maintain a more optimistic outlook. Investors eagerly anticipate the upcoming economic data, which may provide a clearer picture of the future direction of the yellow metal’s price.