Gold prices fell for eighth consecutive session on Wednesday, settling at their lowest levels since July 6, as higher Treasury yields and a firm U.S. dollar kept the pressure on the yellow metal.
Price action
-
Gold futures for December delivery
GC00,
+0.34% GCZ23,
+0.34%
were down by $6.90, or 0.4%, to settle at $1,928.30 per ounce on Comex. The yellow metal booked its longest losing streak since the 9-day streak ending March 10, 2017, according to Dow Jones Market Data. -
Silver futures for September
SI00,
+0.46% SIU23,
+0.46%
delivery lost 12 cents, or 0.5%, to end at $22.54 per ounce. -
Palladium futures for September delivery
PA00,
+0.70% PAU23,
+0.70%
fell by $26.20, or 2.1%, to finish at $1,212.40 per ounce, while platinum futures for October delivery
PL00,
+0.73% PLV23,
+0.73%
lost 90 cents, or 0.1%, ending at $891.30 per ounce. -
Copper futures for September delivery
HG00,
+0.37% HGU23,
+0.37%
dropped 1 cent, or 0.3%, to settle at $3.66 per pound.
Market drivers
Gold prices fell for eight straight sessions with the benchmark 10-year U.S. Treasury note yield edging higher after seeing the highest levels since 2008 earlier this week.
In the Federal Reserve’s July meeting minutes, most senior officials said additional monetary policy tightening may be necessary to bring down inflation as they continue to see “significant upside risks” to it.
Treasury yields remained higher on Wednesday afternoon with the yield on the 10-year Treasury note
BX:TMUBMUSD10Y
up 3 basis points to 4.25%. The yield on the policy-sensitive 2-year Treasury
BX:TMUBMUSD02Y
advanced by 2 basis points to 4.97%, according to FactSet data.
Rising crude-oil prices and stronger-than-expected U.S. economic growth stoked fears that inflation could re-accelerate, potentially forcing the Fed and other central banks to continue raising interest rates which could weigh on the prices of the yellow metal.
“In the commodity arena, gold has been drifting lower this month, stuck below a short-term downtrend line as the forceful rally in real yields and the dollar’s revival have taken the shine out of the precious metal,” said Marios Hadjikyriacos, senior investment analyst at XM, in emailed commentary.
“One could argue that gold being just 8.5% away from record highs despite the sharp spike in real yields is encouraging in itself, but equally, it’s difficult to envision what will slingshot bullion back higher in the absence of a recession,” Hadjikyriacos said.
The ICE U.S. Dollar Index
DXY,
a gauge of the greenback’s strength against a basket of rivals, rose 0.1% on Wednesday at 103.30.
In U.S. economic data, housing starts rose 3.9% month-over-month to 1.45 million in July, the government said Wednesday. A persistent lack of listing for the sale of existing homes has pushed more home buyers to consider newly built homes, prompting home builders to ramp up construction of new U.S. homes last month.
U.S. industrial production rose 1% in July following declines in the previous two months, the Federal Reserve reported on Wednesday. The rebound was lifted by a 5.2% rise in the production of motor vehicles and parts.
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