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.
The 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.