Gold Retakes $1,800 Amid Rally in Broader Financial Markets

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Gold futures are recording modest gains to kick off the trading week as the yellow metal joins the rally in the broader financial markets. Gold is coming off a weekly gain in an attempt to pare its year-to-date loss in the home stretch of 2021. Can the shiny metal pull off a miracle and erase its losses this year?

December gold futures added $7.70, or 0.43%, to $1,804.50 per ounce at 13:35 GMT on Monday on the COMEX division of the New York Mercantile Exchange. Gold enjoyed a 2.2% weekly boost, although it is still down more than 5% this year.

Silver, the sister commodity to gold, is looking to retake $25 this week for the first time since July. November silver futures picked up $0.071, or 0.29%, to $24.52 an ounce. The white metal surged about 5% last week, lowering its year-to-date decline to below 8%.

Bullion is likely benefiting from the gains in the broader stock market since nearly everything is up. However, gold prices may be capped by a strengthening US dollar with the US Dollar Index (DXY) up 0.17% to 93.80, from an opening of 93.64. A stronger DXY, which measures the greenback against a basket of currencies, is typically bad for dollar-denominated commodities because it makes it more expensive for foreign investors to purchase.

Federal Reserve Bank, Washington, Dc, UsaThe US bond market was red across the board, with the benchmark 10-year yield down 0.027% to 1.628%. The one-year bill dipped 0.002% to 0.117%, while the 30-year bond dropped 0.009% to 2.082%. Lower yields are also good for the metals market since it reduces the opportunity cost of holding non-yielding bullion.

“The U.S. dollar has been retreating from the yearly highs reached earlier in October, as markets adjust to the spreading of inflation-related fears across the globe, which means that the same forces that supported the U.S. dollar earlier in the year are now propelling other currencies to fresh highs, a dynamic that penalizes the dollar and therefore supports gold,” wrote Ricardo Evangelista, senior analyst at ActivTrades in a Monday research note.

Gold could be trying to muster up some gains ahead of next week’s interest rate-setting Federal Open Market Committee (FOMC) policy meeting. The Federal Reserve has signaled that it could start tapering its aggressive $120-billion-a-month quantitative easing program, though Chair Jerome Powell has stated that it is too early to raise interest rates.

In other metals markets, November copper futures edged up $0.018, or 0.4%, to $4.516. November platinum futures tacked on $1.00, or 0.1%, to $1,053.10 per ounce. November palladium futures rose $1.90, or 0.09%, to $2,037.50 an ounce.

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