Gold ticks higher early Wednesday on weaker dollar and as inflation concerns supported prices of the yellow metal while strong Treasury yields pressured them.
The slightly weaker dollar made gold more attractive as an alternate investment, even as Treasury yields near a 5-month peak raised the opportunity cost of holding bullion. 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 has been going out of gold.
December gold futures rose 0.3% Tuesday to settle at $1,770.50 an ounce on Comex, and the front-month contract is up 0.1% so far this week. 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 6.6% so far in 2021. The December contract is up $7.70 (+0.43%) an ounce to $1,778.20 and the DG spot price is $1,778.40.
Central bankers around the world have come under pressure to act to taper stimulus measures and possibly raise interest rates to combat rising inflation.
The Federal Reserve isn’t expected to raise interest rates at its meeting in November, according to CME Group’s FedWatch Tool. But Fed Governor Christopher Waller said Tuesday that the central bank should begin tapering stimulus measures next month, even though interest rate increases are “still some time off.”
In other markets, the Standard & Poor’s 500 Index closed near a record Tuesday, drawing many investors away from other assets.
Investors continue to watch the progress of U.S. President Joe Biden’s economic agenda as it’s considered by Congress.
In economic news, the Fed’s Beige Book report from the 12 regional banks is due out Wednesday, and a number of Fed presidents are scheduled to speak on racism and wealth. The U.S. Conference Board’s leading economic index and data on U.S. existing home sales and weekly initial jobless claims are due out Thursday. Fed Chairman Jerome Powell is scheduled to participate in a policy panel Friday.
Meanwhile, the first Bitcoin-linked exchange-traded fund launched as the second-most heavily traded ETF on record, according to Bloomberg.
December silver futures increased 2.7% Tuesday to settle at $23.88 an ounce on Comex, and the front-month contract advanced 2.3% in the first two days of the week. Silver retreated 8.2% in September, its fourth consecutive monthly decline, and plummeted 16% in the third quarter. The metal is down 9.6% so far this year. Silver prices are tied to industrial demand. The December contract is currently up $0.192 (+0.80%) an ounce to $24.075 and the DG spot price is $24.05.
Spot palladium rose 4.4% Tuesday to $2,115.00 an ounce and is up 0.9% so far this week. It lost 23% in September, 31% in the third quarter and is down 14% so far in 2021. Currently, the DG spot price is down $55.90 an ounce to $56.40.
Spot platinum rose 0.6% Tuesday to $1,049.70 an ounce, though it’s down 1.5% so far this week. The metal lost 5.3% last month and 10% last quarter. It’s down 2.2% so far this year. The DG spot price is currently down $2.60 an ounce to $1,049.50.
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