Metals Stocks: Gold prices inch closer to record highs

by | Apr 4, 2023 | Stock Market

Gold prices moved up sharply on Tuesday, with prices inching closer to record highs as the U.S. dollar and Treasury yields weakened after data from the U.S. Labor Department revealed that job openings fell to a 21-month low. Price action
The June gold contract

climbed $37.70, or 1.9%, at $2,038.10 an ounce on Comex. On Monday, it settled at $2,000.40 per ounce, the highest since March 10, 2022, according to Dow Jones Market Data.

Silver futures expiring in May

added $1.044, or 4.4%, to trade at $25.065 an ounce.

June palladium
gained $17.50, or 1.2%, to $1,475.50 an ounce, while July platinum
gained $26.20, or 2.6%, to $1,022.60 per ounce.

May copper
declined by 6.1 cents, or 1.5%, to $3.9845 a pound.

Market drivers Gold “remains very close to its recent highs — a sign that traders are not budging from their view that U.S. interest rates are at or near their peak and expect them to fall this year,” said Craig Erlam, senior market analyst at OANDA, in a note.

The ICE U.S. Dollar index
fell 0.5% to 101.56 in Tuesday dealings, while the yield on 10-year Treasurys
fell nearly 6 basis points to 3.367% after data showing U.S. job openings fell to 9.9 million in February, from a revised 10.6 million in January. Weakness in the dollar tends to decrease the opportunity costs for investors considering dollar-priced gold as an option versus other perceived havens. Meanwhile, lower yields should raise the prospects for gold against government bonds. The so-called “JOLTS” numbers showed that vacancies in the U.S. economy slipped back in February. That’s “the first time we’ve been below 10 [million] vacancies since May 2021,” said Michael Hewson, chief market analyst at CMC Markets UK. “This slowdown has seen U.S. 2-year yields slip back below 4% and on course for their [third] successive daily decline, as the market continues to price in the prospect of rate cuts, and the prospect of a soft landing for the U.S. economy,” he said. Against that backdrop, prices for gold have found support, up a second straight session. Prices traded closer to the all-time, most-active contract settlement high of $2,069.40 an ounce from Aug. 6, 2020, according to Dow Jones Market Data.

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