Gold prices slide for 3rd day as rising Treasury yields, stronger U.S. dollar sap demand
NEW YORK (August 3) Gold prices slipped again on Thursday, heading for a third day in the red, as rising Treasury yields and a stronger U.S. dollar following Fitch Ratings’ downgrade of the U.S. credit rating put pressure on precious metals.
Price action
- Gold prices for December GC00, -0.48% GCZ23, -0.48% delivery fell by $2.30, or 0.1%, to $1,972 per ounce on Comex.
- Silver prices for September SI00, -1.47% SIU23, -1.47% delivery gained 19 cents, or 0.8%, to $23.69 per ounce.
- Palladium futures for September PA00, -0.67% PAU23, -0.67% declined by $9.80, or 0.8%, to $1,232 per ounce, while platinum for October fell by PL00, -0.82% PLV23, -0.82% $5.80, or 0.6%, to $924 per ounce.
- Copper futures HG00, -0.31% HGU23, -0.31% gained 1 cent to $3.85 per pound.
Market drivers
Gold prices have seen their shine dim slightly this week. While the yellow metal is still trading well above its late-June lows of around $1,910 per ounce, a stronger U.S. dollar and rising Treasury yields are threatening to push it even lower.
Fitch Ratings’ decision to downgrade the U.S. credit rating from AAA to AA+ and the Treasury Department’s plans to issue $1 trillion in debt during the third quarter are stoking anxieties that are pushing bond yields higher on Thursday.
“Gold prices are falling as the dollar steals all the safe-haven flows that stemmed from the US sovereign downgrade and as Treasury yields surge on rising debt sale expectations,” said Edward Moya, Senior Market Analyst at OANDA, in emailed commentary.
Pershing Square Capital Management founder Bill Ackman added more pressure on the long end of the yield curve by declaring that he’s short 30-year Treasury bonds.
Rising Treasury yields and a stronger U.S. dollar tend to weigh on gold, since higher yields allow investors to reap higher returns elsewhere, and a stronger dollar makes gold more expensive for buyers in other currencies.
MarketWatch
