Gold futures finished higher Monday, reclaiming the key $1,800 threshold, as the U.S. dollar and Treasury yields retreated after July’s jobs report was viewed as clearing the way for more Federal Reserve interest rate hikes.
Price Action
-
Gold for December delivery
GC00,
+0.65% GCZ22,
+0.65%
jumped $14, or 0.8%, to settle at $1,805.20 per ounce on Comex, its best daily percentage gain since Aug. 4, according to FactSet. -
Silver for September delivery
SI00,
+2.39% SIU22,
+2.39%
rose 77 cents, or 3.7%, to close at $20.61 per ounce. -
Palladium
PAU22,
-2.95%
for September delivery gained $112.80, or 5%, to $2,241.50 per ounce, while platinum
PLV22,
+0.42%
for October delivery climbed $13.70, or 1.5%, to close at $938.40 per ounce. -
Copper
HGU22,
-0.73%
for September delivery rose 4 cents, or 1.1%, to $3.59 per pound.
Market Drivers
Gold futures punched higher on Monday after Friday’s jobs report showed the pace of hiring unexpectedly surged last month, suggesting the Federal Reserve may have to remain aggressive in its effort to cool the economy.
The yellow metal ended Friday lower as Treasury yields and the U.S. dollar rebounded, making nonyielding gold less appealing for other currency holders. The dollar index on Monday stood at 106.30
DXY,
or 0.3% lower when compared with a basket of rival currencies. The benchmark U.S. 10-year Treasury yield
TMUBMUSD10Y,
retreated to 2.76%, while the yield on the 2-year Treasury note
TMUBMUSD02Y,
fell to 3.19%.
U.S. stocks
SPX,
edged higher Monday afternoon in lackluster trade as investors awaited Wednesday’s release of the consumer-price index for July, after it’s prior monthly reading came in above 9% to a 41-year high.
“We are in the ‘dog days’ of summer, whereby trading volumes in many markets wane as traders and investors step away from markets and take family vacations,” wrote Jim Wyckoff, senior analyst at Kitco.com, in a Monday client note.
“Much of Europe is on vacation during August. Markets are likely to be mostly quieter until after the U.S. Labor Day holiday in early September.”
Geopolitical tensions still remained in focus after U.S. House Speaker Nancy Pelosi’s visit last week to Taiwan, which ramped up U.S.-China tensions. China said on Monday it is extending threatening military exercises surrounding Taiwan, according to the Associated Press.
On Wednesday, the latest look at U.S. inflation will be released for the month of July. Core inflation is expected to nudge 0.2% higher to 6.1%, according to market estimates.
Investors also were combing through the Senate’s approval on Sunday of Democrats’ big healthcare, climate and tax package, which would pump billions of dollars into climate and healthcare programs over the next decade, paid for by a 15% minimum tax on some large corporations and a 1% tax on stock buybacks. It contains about $430 billion in new spending.
Read the full article here
