Gold futures are looking to record their third straight session gain on Tuesday as a weaker US dollar support the yellow metal. Investors are also paying close attention to Senate testimony from Federal Reserve Chair Jerome Powell. Can gold try to muster up so momentum after a disappointing 2021?
February gold futures rose $7.40, or 0.41%, to $1,806.20 per ounce. Gold is down more than 1% so far in 2022, extending its 3% loss last year.
Silver, the sister commodity to gold, is looking to rebound after a putrid beginning to the year. February silver futures picked up $0.123, or 0.55%, to $22.585 an ounce. The white metal has slumped more than 3% year-to-date.
The financial markets are monitoring Fed Chair Powell’s re-nomination hearing in front of the Senate Banking Committee. The US central bank released Powell’s official statement prior to the testimony.
“The economy has rapidly gained strength despite the ongoing pandemic, giving rise to persistent supply and demand imbalances and bottlenecks, and thus to elevated inflation. We know that high inflation exacts a toll, particularly for those less able to meet the higher costs of essentials like food, housing, and transportation. We are strongly committed to achieving our statutory goals of maximum employment and price stability. We will use our tools to support the economy and a strong labor market and to prevent higher inflation from becoming entrenched.”
During the testimony, Powell revealed that high inflation will last “well into the middle of this year,” adding that the Fed might have to raise interest rates more if inflation remains elevated.
He also noted that the Fed may begin shrinking its balance sheet this year.
Investors were not bullish on the comments as the leading benchmark indexes were in the red. The US Dollar Index (DXY), which gauges the greenback against a basket of currencies, was also down, sliding 0.13% to 95.87, from an opening of 95.93.
A falling buck is good for dollar-denominated commodities because it makes it cheaper for foreign investors to purchase.
US Treasury yields were mixed, with the benchmark 10-year yield down half a basis point to 1.775%. The one-year bill added 0.013% to 0.455%, while the 30-year bond dropped 0.015% to 2.094%.
Meanwhile, the US annual inflation rate for December will be released on Wednesday. The market is forecasting a 7% reading.
In other metal commodities, February copper futures surged $0.042, or 0.97%, to $4.394 per pound. February platinum futures tacked on $15.20, or 1.63%, to $948.80 an ounce. February palladium futures shed $37.20, or 1.95%, to $1,872.00 per ounce.