Metals Stocks: Gold finishes higher, shaking off early losses that pulled prices to a 2½-year low

by | Oct 21, 2022 | Stock Market

Gold finished higher on Friday, giving up early losses that brought prices to their lowest intraday level in 2½ years as investors continued to look for hints on Federal Reserve’s next move on interest rates.Price action
Gold futures for December delivery
GCZ22,
+1.34%

GC00,
+1.34%
rose $19.50, or 1.2%, to settle at $1,656.30 per ounce on Comex after touching a low at $1,621.10, the lowest intraday level for a most-active contract since April 2020, according to Dow Jones Market Data. For the week, prices rose nearly 0.5%.

December silver
SIZ22,
+2.73%
climbed 38 cents, or 2%, to $19.066 per ounce, ending the week with a 5.5% gain.

Palladium futures
PAZ22,
-3.01%
for December dropped $74.10, or 3.6%, to $2,005.50 per ounce, but added 0.4% for the week, while January platinum
PLF23,
+2.16%
rose $18.80, or nearly 2.1%, to $933.90 per ounce, for a weekly rise of 4.4%.

December copper
HGZ22,
+1.76%
climbed 6 cents, or 1.9%, to $3.4745 per pound, with prices posting a weekly gain of 1.5%.

What’s happening Gold was under pressure and lacking much interest, but “snapped back quickly and sharply” early Friday after speculation a 75 basis point interest-rate increase in November by the Federal Reserve, might be followed by only 50 basis point rate increase in December, said Jeff Wright, chief investment officer at Wolfpack Capital. “The gold market took this speculative info…as sign of a Fed pivot towards data dependency into 2023,” and gold prices moved higher.

Read: Palladium has outperformed gold and silver this year, but may still have room to climb San Francisco Fed President Mary Daly on Friday said the central bank needs to start talking about slowing down its rapid pace of recent increases in their benchmark interest rate. “I think the time is now to start talking about stepping down — the time is now to start planning for stepping down,” Daly said, in a talk at the University of California Berkeley. Even so, Wright told MarketWatch he believes “gold is still under pressure and will not be able to sustain any rally for quite some time.” Treasury yields and the U.S. dollar have continued to call the tune across markets, with overall strength for both driving global stocks and commodities like gold lower as investors brace for more interest-rate hikes from the Fed, along with the possibility that the U.S. economy will soon slide into a recession. The yield on the 10-year Treasury note
TMUBMUSD10Y,
4.219%
climbed to as high as 4.325% in Friday dealings, its highest level since at least 2008, before easing back to trade at 4.218% The ICE U.S. Dollar index
DXY,
-0.78%
was down 0.6% at 112.227, but remains slightly higher month to date. Also read: What happens if more buyers refuse metals like aluminum from Russia? The LME doesn’t want to find out

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