Gold prices reached a four-week high on Tuesday, benefiting from a weaker U.S. dollar and lower Treasury yields. This positive development has also influenced the prices of other precious metals and commodities, maintaining their upward trajectory.
Price Movement
- Gold futures for August delivery (GC00, +0.61% GCQ23, +0.61%) experienced a gain of $9.60, or 0.5%, reaching $1,966 per ounce on Comex.
- Silver futures for September delivery (SI00, +0.39% SIU23, +0.39%) saw an increase of 7 cents, or 0.3%, landing at $25.10 per ounce.
- October platinum (PLV23, +0.10%) fell by 30 cents, or less than 0.1%, to $987 per ounce, while palladium for September (PAU23, +1.16%) rose by $13.40, or 1%, settling at $1,294.50 per ounce.
- Copper futures for September (HGU23, -0.88%) experienced a decline of 3 cents, or 0.8%, reaching $3.81 per pound.
Market Influencers
According to Jim Wyckoff, a senior analyst at Kitco.com, several factors are contributing to the mildly bullish sentiment in the precious metals market. These factors include a weaker U.S. dollar index, stronger crude oil prices, and a decrease in U.S. Treasury yields.
Gold prices have rebounded in the past week after hitting three-month lows following the release of the U.S. consumer-price index for June. This report was seen by market analysts as a potential turning point in the Federal Reserve’s fight against inflation. The data revealed that consumer prices grew by only 0.2% in June, marking the slowest monthly increase since August 2021.
Consequently, the prices of gold, silver, and other commodities like crude oil and copper have risen due to the weakening U.S. dollar and declining Treasury yields. The lower Treasury yields make assets such as gold, which do not provide investors with a yield, more appealing in comparison. It’s worth noting that bond yields move in the opposite direction of prices.
On Tuesday, the ICE U.S. Dollar Index (DXY, -0.15%), which measures the dollar’s strength against other major currencies, experienced a slight slip. Additionally, the 10-year Treasury yield (TMUBMUSD10Y, 3.755%) declined by 4.3 basis points to 3.757%.
