Gold Struggles To Hold Gains As Fed Hawks Reduce Pivot Narrative

Gold futures recorded small gains on Tuesday, unable to take advantage of a weaker US dollar and tumbling Treasury yields. The yellow metal has struggled for most of 2022, though it has found some silver linings on potentially the Federal Reserve pausing its tightening cycle next year and perhaps even slashing rates.

December gold futures rose $1.60, or 0.09%, to $1,741.20 per ounce at 15:47 GMT on Tuesday on the COMEX division of the New York Mercantile Exchange. Gold prices are on track for a monthly gain, but they are still down about 4.9% year-to-date.

Silver, the sister commodity to gold, topped $21 on Tuesday. December silver futures jumped $0.168, or 0.8%, to $21.04 an ounce. The white metal is also on track for a monthly gain of around 10%. So far this year, the white metal has slumped close to 10%.

Gold and silver prices are trying to locate a specific trading range now that the greenback is stalling after peaking earlier this month.

The US Dollar Index (DXY), which gauges the greenback against a basket of currencies, fell 0.33% to 107.47, from an opening of 107.84. The index is down 3% on the month, but it has rallied 12% year-to-date.

A weaker buck is good for commodities priced in dollars because it makes it cheaper for overseas investors to purchase.

US Treasury yields were mixed on Tuesday, with the benchmark ten-year yield down 5.4 basis points to 3.769%. The one-month bill shed 1.8 basis points to 3.856%, while the 30-year bond fell 6.5 basis points to 3.842%. The recession-indicating spread between the two- and ten-year yields widened to negative 77 basis points.

On the data front, it was relatively quiet, with the Fed Bank of Richmond’s Manufacturing, Shipments, and Services indexes remaining in negative territory.

On Wednesday, housing, durable goods orders, and purchasing managers’ index (PMI) data will be released ahead of the Thanksgiving holiday.

Traders will also comb through the minutes from this month’s Federal Open Market Committee (FOMC) policy meeting.

In other metal markets, December copper futures added $0.0505, or 1.41%, to $3.622 a pound. December platinum futures tacked on $12.90, or 1.31%, to $1,000.80 per ounce. December palladium futures picked up $7.50, or 0.4%, to $1,860.50 an ounce.

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