Gold droops on stronger dollar in Monday morning trading. Also impacting the yellow metal is the rebound in Treasurys. The U.S. benchmark 10-year Treasury yields extended gains as investors ramped up rate hike bets.
All three assets are traditional hedges against the inflation that has plagued the global economy in the wake of pandemic stimulus measures, but most of the risk-off trade is going into non-bullion assets. Central bankers around the world have come under pressure to act to taper stimulus measures and possibly raise interest rates to combat rising inflation.
December gold futures rose 0.6% last week to settle at $1,768.30 an ounce on Comex, though the front-month contract fell 1.7% Friday. Gold retreated 3.4% in September after gaining just 90 cents in August. It dropped $14.60 in the third quarter. The yellow metal is down 6.7% so far in 2021. The December contract is currently down by $0.20 (-0.01%) an ounce to $1,768.10 and the DG spot price is $1,765.50.
Holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, fell 0.3% Friday to 980.1 metric tons, Reuters reported.
Equities tumbled early Monday as rising energy prices added to worries about inflation and a report showed economic growth in China slowed.
Chinese GDP growth slowed to 4.9% in the third quarter compared with the year earlier, according to data released Monday by the National Bureau of Statistics. Economists had forecast a 5.2% expansion. Industrial production also missed expectations, rising 3.1% in September, less than the 4.5% anticipated by economists.
U.S. inflation data released last week along with the minutes of the last Federal Reserve policy meeting increased investor speculation that the central bank would act to taper pandemic stimulus measures at policymakers’ next meeting in early November. Retail sales unexpectedly rose in data released Friday, though Census Bureau data on consumer sentiment showed that they spent at a much faster-than-expected pace in September.
U.S. industrial production data for September and the National Association of Homebuilders index for October are due out Monday.
Meanwhile, Bank of England Governor Andrew Bailey signaled Sunday that the British central bank is preparing to boost interest rates soon for the first time since the pandemic began because of inflationary risks.
December silver futures increased 2.8% last week to settle at $23.35 an ounce on Comex, though the front-month contract retreated 0.6% Friday. Silver retreated 8.2% in September, its fourth consecutive monthly decline, and plummeted 16% in the third quarter. The metal is down 12% so far this year. Silver prices are tied to industrial demand. The December contract is down $0.129 (-0.55%) an ounce to $23.22 and the DG spot price is $23.10
Spot palladium was flat last week after falling 2.9% Friday to $2,096.00 an ounce. It lost 23% in September, 31% in the third quarter and is down 14% so far in 2021. Currently, the DG spot price is off by $21.90 an ounce to $1,043.00.
Spot platinum rose 3.3% last week to $1,065.70 an ounce after advancing 0.4% Friday. The metal lost 5.3% last month and 10% last quarter. It’s down 0.7% so far this year. The DG spot price is currently down $83.60 an ounce to $2,015.00.
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