Gold prices retreated on Tuesday as a stronger dollar put pressure on precious-metals prices as traders awaited the latest batch of U.S. inflation data due out Wednesday.
Price action
-
Gold for December delivery
GC00,
-0.61% GCZ23,
-0.61%
fell by $10.80, or 0.6%, to $1,936.40 per ounce on Comex. -
December silver
SIZ23,
-0.01%
fell by 5.3 cents, or 0.2%, to $23.33 per ounce. -
Platinum for October delivery
PLV23,
+1.32%
climbed by $12.10, or 1.3%, to $914.40 per ounce, while December palladium
PAZ23,
+1.91%
tacked on $12.80, or 1.1%, to $1,232 per ounce. -
December copper
HGZ23,
-0.38%
shed 3 cents, or 0.8%, to $3.777 per pound.
Market drivers
Gold and silver prices have softened since the beginning of September as the U.S. dollar has continued to climb, heaping pressure on commodity prices. Rising bond yields and the prospect of another interest-rate hike from the Federal Reserve in November have also contributed to precious metals prices’ woes.
The strength of the dollar, “a headwind for gold, has been persistent with only a few minor pullbacks along the way,” Michael Armbruster, managing partner at Altavest, told MarketWatch. “More important, long-term Treasury yields continue to trend higher.”
“We like gold in the longer run, but these two headwinds are keeping gold in check for the time being,” he said.
Strength in the U.S. dollar on Tuesday once again coincided with weaker gold prices, as U.S. currency rebounded from a slight pullback on Monday.
Since logging its lowest end-of-day level of the year on July 13, the ICE U.S. Dollar Index
DXY
has climbed more than 5%, according to FactSet data. The dollar index, which measures the buck’s strength against a basket of its main rivals with a heavy weighting toward the euro, was up 0.3% at 104.84 in Tuesday trade.
Wednesday’s U.S. CPI report is expected to show that, in August, consumer prices rising by 0.6%. The data are expected to make a splash in precious-metals markets, analysts said. The numbers are due out at 8:30 a.m. Eastern time.
“Look for more active trading in many markets in the immediate aftermath of the CPI report — especially if it’s a miss from market expectations,” said Jim Wyckoff, senior analyst at Kitco, in emailed commentary.
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