By Myra P. Saefong and Joseph Adinolfi
Silver prices climbed sharply on Monday to post their strongest daily percentage gain since February 2021, and gold futures rose to their highest finish since mid-September as a disappointing reading on U.S. manufacturing contributed to a decline in U.S. Treasury yields.
December silver SIZ22 climbed $1.55, or 8.1%, to settle at $20.589 per ounce, with most-active contract prices posting their biggest daily advance since February 2021, according to Dow Jones Market Data. The settlement was also the highest since Aug. 12.
Gold for December delivery /zigman2/quotes/210039517/delayed GCZ22 +0.08% advanced by $30, or 1.8%, to end at $1,702 per ounce on Comex, the highest finish since Sept. 14.
December palladium /zigman2/quotes/229904593/delayed PAZ22 -0.71% climbed $50, or 2.3%, to $2,232.20 per ounce, while January platinum /zigman2/quotes/230581331/delayed PLF23 -0.13% climbed $41, or 4.8%, to $900.10 per ounce.
December copper /zigman2/quotes/210059544/delayed HGZ22 +0.17% fell by less than 0.1%, to $3.41 per pound.
Precious metals strategists attributed gains in gold and silver Monday to a pullback in Treasury yields.
“Out of the two metals, silver was the most impressive…as yields fell on the back of [the Bank of England’s] temporary bond buying programme and disappointing U.S. ISM manufacturing PMI data,” said Fawad Razaqzada, market analyst at City Index and FOREX.com, in a market update.
The Institute for Supply Management’s manufacturing survey declined to a 28-month low of 50.9% inSeptember, from 52.8% in August.
The 10-year yield /zigman2/quotes/211347051/realtime BX:TMUBMUSD10Y 0.00% was off nearly 16 basis points to 3.6387%. The ICE U.S. Dollar Index /zigman2/quotes/210598269/delayed DXY -0.21% , a gauge of the dollar’s value against a basket of six rivals, also edged down by 0.2% to 111.934.
Rupert Rowling, an analyst at Kinesis Money, said silver has been rising due to expectations that it will be in “big demand” as the transition toward clean energy continues.
Meanwhile, analysts at Sevens Report Research said in a Monday research note that “the fundamental backdrop is getting less bearish” for gold “as Treasury yields and the dollar may be approaching a peak.”
However, “if we do not see a peak in yields and the buck,” investors should expect the precious metal to tumble to new lows, they said.
Downside risks remain for gold as “major central banks are expected to continue raising interest rates aggressively to combat surging inflation,” analysts at ICICI Bank wrote in a weekly update released Monday. U.S. Federal Reserve officials “stressed the need last week to keep hiking rates to restrictive levels amid persistent inflationary pressures, even at the risk of slower growth and further market volatility.”