Gold futures hovered around $2,000 to kick off the trading week, finding support on a weaker US dollar. Gold prices have trended downward since touching near all-time highs as investors continued to take profit. But prices have been rebounding on growing recession fears. Can the yellow metal firm above $2,000 again?
June gold futures rose $9.20, or 0.46%, to $1,999.70 per ounce at 19:14 GMT on Monday on the COMEX division of the New York Mercantile Exchange. Gold prices are coming off a weekly loss of about 0.7%, but they are up nearly 10% year-to-date.
Silver, the sister commodity to gold, climbed above $25 to start the trading week. June silver futures tacked on $0.167, or 0.67%, to $25.225 an ounce. The white metal was flat last week and is still up more than 4% so far this year.
Gold prices settled higher on a sliding greenback and disappointing economic news.
The US Dollar Index (DXY), a measurement of the buck against a basket of currencies, tumbled 0.45% to 101.36, from an opening of 101.2, on Monday. The index slumped 0.7% last week, adding to its year-to-date loss of 2.1%.
A weaker greenback is good for commodities priced in dollars because it makes it cheaper for foreign investors to purchase.
“This market is treading water in the short term, waiting on its next piece of economic data that could potentially jolt it in one direction or the other,” said David Meger, director of metals trading at High Ridge Futures.
Financial markets were mixed after two new pieces of data showed a slowing economy.
The Dallas Fed Bank general business activity index for manufacturing contracted for the 11th consecutive month, sliding to -15.7 in March. It also represented the lowest reading since December, caused by falling production, new orders, growth rate, shipments, and declining work hours. Employment expansion moderated while capacity utilization rose. Outlook uncertainty climbed to 24.7.
The Chicago Fed National Activity Index was unchanged at -0.19, worse than the market estimate of -0.02.
This week, additional regional central bank data and housing and durable goods orders will be published. Plus, the first-quarter GDP growth rate will be released, which is expected to come in at 2%.
The US Treasury market was mostly red across the board, with the benchmark ten-year yield down more than five basis points to 3.517%. The one-month bill surged 11.8 basis points to 3.466%, while the 30-year bond dropped five basis points to below 3.73%.
In other metal markets, June copper futures shed $0.021, or 0.53%, to $3.959 per pound. June platinum futures declined $38.60, or 3.39%, to $1,100.10 an ounce. June palladium futures cratered $81.90, or 5.1%, to $1,525.00 per ounce.