Gold futures on Tuesday scored their first gain in three sessions after back-to-back losses saw prices briefly dip below $2,000 an ounce a day earlier, for the first time in a week.
Price action
-
Gold for June delivery
GC00,
-0.79%GCM23,
-0.79%
climbed by $12.70, or 0.6%, to settle at $2,019.70 an ounce on Comex. -
May silver
SI00,
+0.40%SIK23,
+0.40%
settled at $25.26 an ounce, up 18 cents, or 0.7%. -
June palladium
PAM23,
-1.82%
rose $82.40, or 5.3%, to $1,642.90 an ounce, while July platinum
PLN23,
-0.14%
added $37.70, or 3.6%, at $1,097.30 an ounce. -
May copper
HGK23,
-0.89%
added 3 cents, or 0.6%, to end at $4.09 a pound.
Market drivers
Gold nursed the “deep wounds inflicted by the recent selloff that saw prices fall more than 2% in two days,” said Lukman Otunuga, manager, market analysis at FXTM.
Renewed expectations around the Federal Reserve extending its rate hike cycle deeper into 2023 ”hammered zero-yielding gold,” he said. ”This could be another volatile week for the precious metal due to more speeches from Fed officials.” See the U.S. economic calendar.
The Fed will also release its latest Beige Book, a report on current economic conditions, on Wednesday after the settlement for gold futures.
In an interview posted by Reuters Tuesday, St. Louis Federal Reserve President James Bullard reiterated his call for higher U.S. interest rates to combat inflation and said he doesn’t see a recession taking place anytime soon. On Friday, Fed Gov. Christopher Waller also said the Fed needs to continue raising interest rates because inflation is “still much too high.”
After reaching their highest levels in more than a year last week, gold prices touched an intraday low of $1,993.40 on Monday, the lowest since April 10 for most-active contract, FactSet data show.
Still, prices for the yellow metal on Comex had settled at $2,055.30 on Thursday, marking the second highest finish on record, trading within striking distance of the record settlement of $2,069.40 logged on Aug. 6, 2020.
The most-active contract for silver on Thursday also ended that session at its highest since April 2022.
“After such strong gains, both metals are in need of consolidating their gains, especially after relative strength indicators began flashing overbought in both metals,” said Ole Hansen, head of commodity strategy at Saxo Bank.
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