Gold steady near one-week lows early Wednesday as gains in the dollar and Treasury yields pressured the yellow metal.
The precious metal posted its biggest intraday decline in a month in Tuesday’s session as the dollar and Treasurys strengthened amid increased speculation that the Federal Reserve will keep interest rates high for some time.
Front-month gold futures fell 0.7% Tuesday to settle at $1,952.60 an ounce on Comex. The December contract gained 1.4% last week. Comex futures and options traded without a settlement Monday because of the U.S. Labor Day holiday. Bullion dropped 2.2% in August after rising 4.1% in July and losing 2.7% in June. The metal is up 6.9% in 2023. The December contract is currently down 0.2 (-0.01%) an ounce to $1952.40 and the DG spot price is $1922.90.
Holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, fell 0.1%, Reuters reported.
The closely watched U.S. jobs report for August came in Friday showing nonfarm payrolls increased by a greater-than-expected 187,000, but the unemployment rate rose to 3.8%, the highest level since February 2022. Labor market data and inflation data are both closely watched by the Fed when determining monetary policy. The Fed’s favorite inflation measure, the personal consumption expenditures price index, also came out last week and showed signs that inflation is slowing.
Fed Governor Christopher Waller told CNBC Tuesday that “that was a hell of a good week of data we got last week, and the key thing out of it is it’s going to allow us to proceed carefully…. We can just sit there, wait for the data, see if things continue.”
The Fed has raised rates by 5.25 percentage points since March 2022. About 93% of investors tracked by the CME FedWatch Tool are betting that the Fed will keep its federal funds rate unchanged this month at 5.25% to 5.50%. Just 7% expect it to raise rates another 25 basis points. Most still expect the Fed to hold in November and December, too, but by much slimmer margins.
In other economic news, investors will be awaiting Wednesday’s release of the Fed’s Beige Book report on economic conditions from the 12 regional banks. Thursday brings U.S. weekly initial jobless claims and a series of remarks from Fed officials. Wholesale inventories data and consumer credit data for July both come out Friday.
Front-month silver futures lost 2.8% Tuesday to settle at $23.87 an ounce on Comex, and the December contract retreated 0.1% last week. Silver slipped 0.6% in August after gaining 8.5% in July and dropping 2.4% in June. It’s down 0.7% in 2023. The December contract is currently down $0.303 (-1.27%) an ounce to $23.570 and the DG spot price is $23.34.
Spot palladium decreased 0.6% Tuesday to $1,233.00 an ounce, and it was unchanged last week. Palladium fell 5.3% last month after rising 3.6% in July and falling 9.5% in June. Palladium has plummeted 32% so far this year. The DG spot price is currently down $17.00 an ounce to $1210.00.
Spot platinum dropped 3.4% Tuesday to $937.00 an ounce but gained 2% last week. Platinum advanced 1.7% in August after gaining 5.2% in July and falling 9.3% in June. Platinum is down 12% in 2023. The current DG spot price is down $12.40 an ounce to $923.10.
Disclaimer: This editorial has been prepared by Dillon Gage Metals for information and thought-provoking purposes only and does not purport to predict or forecast actual results. This editorial opinion is not to be construed as investment advice or a recommendation regarding any particular security, commodity, or course of action. Opinions expressed herein cannot be attributable to Dillon Gage. Reasonable people may disagree about the events discussed or opinions expressed herein. In the event any of the assumptions used herein do not come to fruition, results are likely to vary substantially. It is not a solicitation or advice to make any exchange in commodities, securities, or other financial instruments. No part of this editorial may be reproduced in any manner, in whole or in part, without the prior written permission of Dillon Gage Metals. Dillon Gage Metals shall not have any liability for any damages of any kind whatsoever relating to this editorial. You should consult your advisers with respect to these areas. By posting this editorial, you acknowledge, understand, and accept this disclaimer.