Metals Stocks: Gold, silver climb as dollar falls to 2-week low

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Gold prices were poised to settle at a two-week high on Monday, while silver looked to end the session at its highest since mid-August as the U.S. dollar hit a two-week low and Treasury yields pull back, helping to bolster demand for precious metals ahead of Tuesday’s critical inflation update.

Price action
  • Gold futures GCZ22, +0.69% for December delivery climbed $9.80, or 0.6%, to $1,738.40 per ounce on Comex, with the most actively traded contract poised to settle at its highest price since Aug. 29, FactSet data show.
  • December silver SIZ22, +5.77% climbed 94.3 cents, or 5%, to $19.71 per ounce. Prices eyed their highest finish since Aug. 17, trading higher for a sixth consecutive session.
  • Palladium futures PAZ22, +4.29% for December delivery climbed $71.90, or 3.3%, to $2,249.50 while platinum PLV22, +2.73% for October delivery climbed $18.40, or 2.1%, to $895.30 per ounce.
  • December copper HGZ22, +1.30% climbed 2.9 cents, or 0.8%, to $3.5965 per pound.
What analysts say

Analysts attributed the moves higher for gold and silver to the weakness in the dollar, as well as lower Treasury yields.

Gold and silver prices are posting good advances “boosted by another sharp decline in the U.S. dollar index, which hit a two-week low overnight,” wrote Jim Wyckoff, senior analyst at Kitco.com.

The ICE U.S. Dollar Index DXY, -0.80%, a gauge of the dollar’s strength against a basket of rivals, was off 0.8% to 108.18, trading around its lowest levels in two weeks.

Gold has been “able to defend that $1,700 support level on a number of occasions in recent days, suggesting that dip-buyers are trying to take advantage of downbeat prices,” Fawad Razaqzada, market analyst at City Index and FOREX.com, told MarketWatch. Gold futures last touched intraday lows under $1,700 on Sept. 1, FactSet data show.

The main focal point for gold will be on Tuesday’s publication of U.S. inflation data for August, he said. “Gold investors are hopeful that inflation has peaked.”

If there’s a “weaker-than-expected print on CPI, then this would further support the ‘peak inflation’ narrative and consequently, I would expect the metal to rise a bit more meaningfully on the back of that,” said Razaqzada.

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