Gold prices slip from 6-week high as U.S. dollar firms
NEW YORK (July 19) Gold slipped early Wednesday after seeing six week highs helped by a weakening U.S. dollar and lower Treasury yields in recent sessions.
Price action
- Gold futures for August delivery GC00, +0.05% GCQ23, +0.05% shed $5, or 0.3%, to $1,975 an ounce on Comex. Prices for the most-active contract settled at $1,980.80 on Tuesday, the highest since June 6.
- Silver futures for September delivery SI00, +0.49% SIU23, +0.49% fell by 6 cents, or 0.2%, to $25.20 per ounce.
- October platinum PLV23, -0.19% lost $7.40, or 0.7%, to $987 per ounce, while palladium for September PAU23, -0.76% fell by $27, or 2.1%, to $1,289 per ounce.
- Copper futures for September HGU23, -0.65% declined by 3 cents, or 0.9%, to $3.80 per pound.
Market drivers
The rally in gold took a breather on Wednesday as the U.S. dollar traded slightly higher. The ICE U.S. Dollar Index DXY, +0.28%, a gauge of the dollar’s value against major currencies, rose 0.3% to 100.27.
Looking ahead, next week’s Federal Reserve policy meeting could be a make-or-break moment for gold, as investors will be watching to try and gauge whether the latest batch of U.S. economic data has prompted the Fed to significantly change its plans for further interest rate increases.
“How long gold can continue to trade at such high levels remains to be seen with the reaction to next week’s Fed rate decision a key staging post for gold’s long-term durability,” said Rupert Rowling, a market analyst at Kinesis Money.
“Considering that another increase is priced in already, gold may yet prove able to shrug off the latest hike but if there is an indication in the press conference and supporting commentary that further hikes are still likely, then gold could fall sharply.”
Meanwhile, Treasury yields moved lower early Wednesday. The yield on the 10-year note TMUBMUSD10Y, 3.740%, considered the U.S. benchmark, fell 3.9 basis points to 3.755%.
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