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Metals Stocks: Gold halts 4-session price slide as U.S. investors turn to Thanksgiving

Gold prices ended slightly higher Wednesday, snapping a four-session decline, despite a rise in the U.S. dollar and a batch of mostly upbeat U.S. economic reports.

December gold 
GCZ22,

GC00,
+0.08%

picked up 50 cents, or less than 0.1%, to settle at $1,784.30 an ounce, after slumping $22.50, or 1.2%, on Tuesday. That bruising session marked the lowest finish for a most-active contract since Nov. 3., and followed a 2.4% drop on Monday, the sharpest percentage fall since Aug. 6, FactSet data show.

U.S. markets will be closed for the Thanksgiving holiday on Thursday.

Earlier this week, gold dropped through the psychologically important level of $1,800 gain as Treasury yields climbed in a holiday-shortened week. Treasurys
TMUBMUSD10Y,
1.647%

TMUBMUSD30Y,
1.973%

TMUBMUSD02Y,
0.637%

saw the yield climb abate somewhat on Wednesday, at least at among longer-dated durations.

However, the rise in the dollar was creating a headwind for dollar-pegged assets, strategists said. The ICE Dollar Index
DXY,
+0.40%

was up 0.4% and headed for a weekly gain of 0.9% to take the index to around its highest level since the summer of 2020.

A stronger dollar can make assets priced in the currency, such as gold, more expensive to overseas investors.

Economic data showed U.S. durable-goods orders dipping in October, weekly jobless claims hitting the lowest level since 1969, international trade in goods sinking 14.6% in October, and gross domestic product rising at a slightly revised annualized 2.1% in the third quarter.

Other data also highlighted historically elevated levels of inflation, with a measure of the cost of goods and services jumping 0.6% in October, based on the personal consumption expenditure index or PCE, and rose 5% over the past year from 4.4% in September. That’s the highest level since December 1990. The PCE index is the Federal Reserve’s favored inflation indicators.

Investors have been factoring in a more hawkish approach for 2022 by newly renominated Federal Reserve Chairman Jerome Powell, and the latest batch of data showing continued economic strength.

“The bulls have faded this week and need to step up and show power very soon to avoid serious near-term technical damage,” said Jim Wyckoff, senior analyst at Kitco.com, in a note to clients.

And investors are unlikely to re-enter gold at long positions around the holiday, said Jeffrey Halley, senior market analyst at OANDA, in a note to clients.

“Momentum will be muted and that means that the $1835.00 to $1850.00 region will cap gains this week, although I will be surprised if we even get as far as $1810.00 an ounce. If U.S. yields remain firm this week, gold will be vulnerable to further losses,” said Halley.

Elsewhere, December silver
SI00,
+0.17%

rose 6.1 cents, or 0.3%, to end at $23.496 an ounce, while industrial metal December copper 
HG00,
+0.97%

HGZ21,
+0.97%

added 3.55 cents, or 0.8%, to settle at $4.459 a pound.

January platinum
PLF22,
+1.16%
,
meanwhile, gained $11.10, or 1.2%, to settle at $975.30 an ounce, and palladium for December delivery
PAZ21,
-0.07%

shed $2.40, or 0.1%, to finish Wednesday’s session at $1,847.90 an ounce.

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