Gold ticked up from a seven-month low amid bargain-hunting by investors early Wednesday after a selloff in the prior session.
The yellow metal traded in inverse correlation with the dollar, which slipped early Wednesday after strengthening Tuesday to a 20-year high. The U.S. currency and Treasury yields are soaring because of safe-haven demand amid a fear of economic recession and an expectation of climbing interest rates. Higher interest rates and bond yields raise the opportunity cost of holding gold.
August gold futures tumbled 2.1% Tuesday to settle at $1,763.90 an ounce on Comex, closing below the $1,800 psychological barrier for the first time since January. U.S. financial markets were closed Monday for the Independence Day holiday, and there was no settlement on Comex. Bullion dropped 2.2% in June after tumbling 3.3% in May, its worst month since September. The metal retreated 3.5% in 2021. The August contract is currently down slightly by $1.20 (-0.07%) an ounce to $1,762.70 and the DG spot price is $1,763.60.
More Group of 10 central banks raised interest rates in June than in any month over the past two decades, Reuters reported. The U.S. Federal Reserve is expected to boost interest rates by 75 basis points again at its July meeting after announcing a 75-basis-point rate increase, its biggest since 1994, in June.
Central bankers are attempting to rein in skyrocketing inflation. U.S. inflation remained high in May, according to the Federal Reserve’s favorite measure, though there were signs that it started to ease, data released last week showed.
Investors will be closely watching key June jobs data set for release over the next few days for indications on the state of the economy. The Labor Department will put out its monthly report Friday.
Durable goods orders and factory orders rose more than expected in May, U.S. data released Tuesday showed. And U.S. and Chinese officials held talks amid reports that Washington may be close to rolling back trade restrictions imposed by the Trump administration. That trade standoff sent gold prices soaring in 2020.
September silver futures decreased 2.8% Tuesday to settle at $19.125 an ounce on Comex. Silver declined 6.2% in June after falling 6.1% in May and 8.2% in April. It retreated 12% in 2021. Silver prices are tied to industrial demand. The September contract is currently up $0.094 (+0.49%) an ounce to $19.215 and the DG spot price is $19.38.
Spot palladium dropped 1.7% Tuesday to $1,959.00 an ounce. It fell 2.9% in June after losing 14% in May, the biggest monthly decline since September. It retreated 22% in 2021. Currently, the DG spot price is up $33.70 an ounce to $1997.50.
Spot platinum retreated 2.2% Tuesday to $874.60 an ounce. It decreased 7.2% in June after gaining 2.3% in May and losing 9.4% last year. The DG spot price is currently up $1.30 an ounce, hovering between positive and negative territory at $877.00.
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