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Gold futures staged a partial rebound Tuesday, but held below $1,800 an ounce, helped by some weakness in the U.S. dollar and a pullback in Treasury yields after the metal’s losses in the previous two sessions.
Price action
-
February gold
GC00,
-0.07%
GCG23,
-0.07%
added $1.10, or nearly 0.1%, to settle at $1,782.40 per ounce on Comex after posting back-to-back session declines. -
Silver prices due in March
SI00,
-0.16%
SIH23,
-0.16%
shed 8 cents, or 0.4%, to $22.335 per ounce. -
March palladium prices
PAH23,
-0.68%
declined by $9.80, or 0.5%, to $1,851.50 per ounce, while platinum prices
PLF23,
+0.04%
fell $12.10, or 1.2%, to settle at a two-week low of $995.40 per ounce. -
Copper prices for March
HGH23,
-0.57%
climbed 2 cents, or 0.6%, to $3.818 per pound.
Market drivers
Gold rebounded a bit on Tuesday from Monday’s correction, though settled below the key $1,800 mark for a second session in a row.
The U.S. dollar had been giving back some of Monday’s gains, with the ICE U.S. Dollar Index
DXY,
touching a low of 104.89, to trade just above its lowest level since late June. The index, however, was up by 0.3% to 105.59 Tuesday afternoon.
Meanwhile, the yield on the 10-year Treasury note eased back by nearly 4 points to 3.563%.
Weakness in the dollar tends to decrease the opportunity costs for investors considering dollar-priced gold as an option versus other perceived havens. Meanwhile, lower yields can raise the prospects for gold against government bonds.
“The direction of yields and the U.S. dollar is likely to remain the key driver for gold prices, with next week’s [Federal Reserve] meeting the key catalyst when it comes to the next move in prices,” said Michael Hewson, chief market analyst at CMC Markets UK.
Gold has seemingly hit a wall after an overall rise in the last six weeks that carried it from around $1,640 per ounce to more than $1,800. Still, gold bulls have been emboldened and some are making predictions for the yellow metal to top out as high as $3,000 per ounce.
While both gold and industrial metals like copper have advanced in recent days, some are worried that rising Treasury yields and a rebound in the dollar, driven by expectations for more interest rises by the Federal Reserve, could help to reverse some of those gains.
“Gold and copper are both in near-term up-trends but a renewed rally in the dollar, rebounding rates, and worries about the health of the global economy are risks to the near-term outlook,” said analysts at Sevens Report Research.
On a technical trading basis, gold has been trending upward for two to three weeks now and a “higher low” appears to be emerging in the $1,760 [to] $1,765 area, up from the previous low near $1,725,” Colin Cieszynski, chief market strategist at SIA Wealth Management, told MarketWatch on Tuesday. “Initial technical resistance has emerged in the $1,800 to $1,810 area with next potential resistance near $1,860 if it manages to break out again.”
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