Metals Stocks: Gold prices end higher after falling to 2-month lows

by | Feb 27, 2023 | Stock Market

Gold prices ended higher on Monday, posting a gain for the first time in six sessions, after the most actively traded contract finished off last week at its lowest price of the year. Overall, a stronger U.S. dollar and rising Treasury yields have undercut the yellow metal, positioning gold prices for a monthly loss.

Price action
Gold for April delivery

rose $7.80, or 0.4%, to settle at $1,824.90 per ounce on Comex. Prices on Friday marked a fifth consecutive session of declines, posted a fourth straight week of losses, and settled at their lowest since late December.

May silver
fell by 14 cents, or 0.7%, to $20.793 per ounce.

June palladium
rose $49.50, or 3.6%, to $1,427.90 per ounce, while April platinum
gained $34, or 3.7%, to $941.90 per ounce.

May copper
rose 6 cents, or 1.5%, to $4.011 per pound.

Market drivers Inflation should be great for precious metals prices, said Adrian Ash, director of BullionVault, in Monday commentary. Gold has often been used as a hedge against inflation. However, inflation has apparently so far been supportive of gold prices only if it’s slowing down, he said. What had been the “New Year 2023’s stone-cold bullish case for gold and silver has now melted on hotter-than-expected inflation data.” Gold prices earlier in February, he said, had been underpinned by expectations that the U.S. Federal Reserve and other central banks would stop raising interest rates and to start cutting their interest rates this year.  But the rising cost of living has “zapped the chances of a reversal in central-bank interest rates,” said Ash. Data on Friday showed that the cost of U.S. goods and services jumped 0.6% in January — the biggest increase since last summer. On Monday, data revealed that orders for manufactured goods sank 4.5% in January, but if transportation is set aside, new orders rose by a solid 0.7% last month. “We have seen quite a shift in market direction in favour of the dollar and yields, with most foreign currencies, gold, and U.S. equities falling out of favour,” Fawad Razaqzada, a market analyst at City Index and, told MarketWatch on Monday. “Those moves were as a result of the market changing its expectations for interest rates outlook swiftly higher.” These expectations have weighed on gold prices while sending yields on global bonds higher. The yield on the 10-year Treasury note
was nearing 4% on Monday. “Precious metals are still flying blind on trader positioning thanks to the continued delays with CFTC data,” Ash told MarketWatch. In early February, the Commodity Futures Trading Commission said an ongoing issue with a third-party service provider impacted some reporting firms’ ability to provide the CFTC with timely and accurate data for the Commitments of Traders Market Report. On Friday, the CFTC said the COT report for the wee …

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