Gold costs settled Monday at their highest in additional than two weeks, discovering some assist from weak point within the U.S. greenback forward of a Federal Reserve determination on financial coverage later this week.
Price motion
-
Gold futures for December supply
GCZ23,
+0.39% GC00,
+0.39%
climbed by $7.20, or 0.4%, to settle at $1,953.40 an oz on Comex. That’s the best most-active contract end since Sept. 1, FactSet knowledge present. -
Silver futures for December supply
SIZ23,
+0.42% SI00,
+0.42%
added 11 cents, or 0.5%, to shut at $23.50 an oz. -
Platinum futures for October
PLV23,
+0.90%
gained $8.80, or practically 1%, to $938.30 an oz, whereas palladium futures
PAZ23,
-0.34%
shed $8.70, or 0.7%, to $1,244 an oz. -
Copper for December supply
HGZ23,
-0.70%
shed 0.6% to settle at $3.78 per pound.
Market drivers
Gold has been holding its floor, digesting prior good points, whereas “outside fundamental pressures,” similar to energy in Treasury yields and energy within the U.S. greenback “fail to decisively push prices down,” mentioned Adam Koos, president at Libertas Wealth Management Group. “This is a positive for gold, in my book.”
Gold futures edged up by 0.2% final week.
Inflation is changing into much less of an element as disinflation continues to be the “new normal,” mentioned Koos. So, whereas the Fed determination on Wednesday is definitely going to make an impression, and whereas [Fed Chariman] Jerome Powell might certainly hike charges one other 0.25% with rhetoric that leans towards continued ‘caution,’ everyone knows that sometime — whether or not that’s this week or someday later this 12 months — the Fed goes to cease tightening and their plan goes to shift to one in all ‘what’s subsequent’.”
What’s subsequent is probably going a interval of “market normalcy, where the markets act on their own, as opposed to being swayed by the invisible hand,” adopted by a time some level sooner or later — even perhaps 2024, when the Fed begins slicing charges once more,” Koos mentioned. That would “certainly be good for gold futures.”
The Fed’s two-day September coverage assembly concludes on Wednesday. The central financial institution is predicted to depart rates of interest on maintain.
Read: 4 issues to look at for at this week’s Fed coverage assembly
Against that backdrop, the ICE U.S. Dollar Index
DXY,
a gauge of the dollar’s energy in opposition to a basket of rivals, was down 0.3% at 105.04 in Monday dealings.
Month so far, gold costs have moved marginally decrease, “primarily reflecting the uptrend in U.S. real yields, although it remains roughly 6% higher over 2023,” analysts at ICICI Bank wrote in a latest analysis observe.
“With markets pricing in a ‘soft-landing’ scenario for the U.S. economy…we see limited downside in U.S. yields that will ensure that gold prices trade with a downside bias in 2023,” they mentioned.
Still, “a reversal in gold prices is possible if the FOMC pivots to a neutral regime and prepares markets for possible rate cuts” the second quarter of 2024 onwards,” the ICICI Bank analysts mentioned.
Source web site: www.marketwatch.com
