By Myra P. Saefong and Joseph Adinolfi
Gold weakened for a third straight day on Wednesday, as a strong U.S. dollar and rising Treasury yields pushed prices to their lowest price settlement in two weeks.
Prices for the precious metal then moved up in electronic trading shortly after the release of minutes from the Federal Reserve’s July monetary policy meeting.
December gold futures /zigman2/quotes/210039517/delayed GCZ22 +0.40% /zigman2/quotes/210034565/delayed GC00 +0.40% were down $13, or 0.7%, to settle Wednesday at $1,776.70 per ounce on Comex. Prices for the most-active contract settled at their lowest since Aug. 3, FactSet data show.
September silver retreated by 35 cents, or 1.8%, to $19.731 an ounce.
September palladium futures settled down by $12.30, or 0.6%, to $2,136.70 an ounce, while October platinum /zigman2/quotes/228424980/delayed PLV22 -1.39% lost $12, or 1.3%, to $919.30 per ounce.
September copper declined by 4 cents, or 1.1%, to $3.5835 per pound.
What analysts are saying
Jim Wyckoff, a senior analyst at Kitco, attributed the pullback in gold and silver this week to two primary factors: weak economic data out of China, and a rebound in the U.S. dollar and Treasury yields.
Gold and silver prices are lower again in U.S. trading Wednesday amid “worries about demand for precious metals following this week’s downbeat economic data coming out of China and still-heightened worries about a U.S. and/or global recession,” Wyckoff said.
The ICE U.S. Dollar Index /zigman2/quotes/210598269/delayed DXY -0.15% , a gauge of the dollar’s strength against a basket of rival currencies, was up 0.2%, while the 10-year Treasury yield /zigman2/quotes/210369575/delayed TY00 +0.03% was up 8.5 basis points to 2.908%.
Having made considerable gains since dropping below $1,700 an ounce in late July, “gold is finding considerable resistance to climb back above the important psychological threshold of $1,800 an ounce,” said Rupert Rowling, market analyst at Kinesis Money, in a market update.
The prospect of future rate hikes by the Fed being less aggressive and shorter-lasting than previously anticipated has been “tempered by the reality that more hikes will nonetheless be needed, which diminishes the appeal of a non-yield bearing asset such as gold,” he said.
Gold prices edged higher from Wednesday’s settlement to $1,780.20 in electronic trading shortly after the release of minutes of the Federal Open Market Committee’s July meeting.
The minutes, released about a half hour after gold futures settled for the session, showed that many Fed officials were worried about the risk that the central bank could tighten the stance of monetary policy by more than was necessary.