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Metals Stocks: Gold prices climb as markets reverse prior day’s move

Gold prices rose on Wednesday as markets broadly reversed their moves from Tuesday’s post-holiday session in the U.S.

Still, the yellow metal remained very much trapped in a range between $1,800 per ounce and $1,890 per ounce — a range that has held for the past six weeks.

Price action
  • Gold futures GC00, +0.36% GCQ22, +0.36% expiring in August gained $8.70, or 0.4%, to $1,846.60.
  • Silver futures SIN22, -1.14% expiring in July dropped 29 cents, or 1.3%, to $21.46 per ounce.
  • Platinum futures PLN22, -0.69% expiring in July were off $12.50, or 1.3%, to $21.50.
  • Palladium futures PAU22, -0.74% expiring in September gained $64, or 3.6%, to $1,853.
  • Copper HGN22, -2.65% futures expiring in July lost 12 cents, or 3%, to $3.91 per ton.
What’s driving markets

Gold started the year right around the $1,800 level, and peaked above $2,050 an ounce in March before surrendering most of those gains during the second quarter. Futures prices have managed to hold above $1,0800 an ounce, but the strength of the U.S. dollar has constrained the value of the yellow metal.

Silver has been seemingly caught in gold’s slipstream, according to a team of commodity analysts from Commerzbank, while demand in emerging markets, particularly the impact of China’s COVID lockdowns, has also weighed on precious metals prices.

Daniel Briesemann, a precious metals strategist at Commerzbank, said “the firmer US dollar is presumably the main factor weighing on gold today” and that any new insights on the Federal Reserve’s plans for battling inflation gleaned from Federal Reserve Chairman Jerome Powell’s Wednesday testimony before the Senate Banking Committee could also impact prices.

See: Powell says U.S. economy can handle the additional rate hikes that are coming

In his opening statement, Powell said the Fed remains resolved to act aggressively to counter inflation, while pushing back against the notion that the Fed’s plans to raise rates even more aggressively.

Briesemann also pointed out that gold has “failed repeatedly in recent weeks to live up to its reputation as a safe haven”. Gold prices are up roughly 0.7% this year, but they’re still outperforming stocks and cryptocurrencies like bitcoin BTCUSD, -0.08% by a wide margin.

Other markets
  • The U.S. dollar DX00, -0.27% DXU22, -0.27% was down 0.2%, according to the ICE U.S. Dollar Index, which measures the greenback’s value against a basket of rich world currencies.
  • Bitcoin prices BTCUSD, -0.08% were down nearly 3% at $20,120.
  • The yield on the 10-year Treasury TMUBMUSD10Y, 3.155% was off more than 14 basis points at 3.15%, roughly 8 basis points higher than the 2-year yield TMUBMUSD02Y, 3.085% which was off 14 basis points at 3.06%.
  • U.S. stocks opened lower, as the Dow Jones Industrial Average YMU22, +0.21% dropped 190 points to 30,340.

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