Gold futures failed to avert a weekly loss as a strengthening US dollar and rising Treasury yields weighed on the precious metal. Investors are also bracing for next week’s much-anticipated inflation report, which many experts forecast will rise. How will this impact the yellow metal?
December gold futures slipped $0.40, or 0.02%, to $1,942.10 per ounce at 19:43 GMT on Friday on the COMEX division of the New York Mercantile Exchange. Gold posted a weekly loss of 1.2%, paring its year-to-date gain of 6.11%.
Silver, the sister commodity to gold, remained below $24 to end the trading week. October silver futures shed $0.065, or 0.28%, to $23.175 per ounce. The white metal suffered a weekly drop of 5.6%, adding to its 2023 decline of more than 4%.
The greenback has been the main driver of gold’s losses this week. The US Dollar Index (DXY), a measurement of the buck against a basket of currencies, rose 0.02% to 105.08, from an opening of 105.06. The index posted a weekly increase of 0.8% and is up 1.51% year-to-date.
A stronger greenback is bad for commodities priced in dollars because it makes it more expensive for foreign investors to purchase.
US Treasury yields were mostly higher on renewed rate-hike fears, with investors beginning to worry that the Federal Reserve could raise interest rates at this month’s Federal Open Market Committee (FOMC) policy meeting.
The benchmark ten-year yield was flat at 4.26%. The two-year yield surged 3.1 basis points to 4.986%, while the 30-year bond shed 2.3 basis points to 4.33%.
Gold is typically sensitive to movements in interest rates because it influences the opportunity cost of holding non-yielding bullion.
Next week, the August consumer price index (CPI) will be released. The Cleveland Fed’s Inflation Nowcast anticipates a print of 3.8%, driven by a significant jump in energy prices.
In other economic data on Friday, wholesale inventories fell 0.2% in July, while used car prices edged up 0.2% in August.
In other metal markets, December copper futures declined $0.048, or 1.2%, to $3.72 per pound. October platinum futures dropped $13.5, or 1.6%, to $894.80 an ounce. October palladium futures slumped $18.00, or 1.48%, to $1,192.30 per ounce.