Gold eyes back-to-back losses as dollar climbs and stocks rally

Gold futures fell for the second day in a row on Thursday, while the dollar extended its recent setback against its main rivals and investors moved their toes again to buy shares.

Gold futures expire in June GC00,
they were down 0.1%, or just under $ 2, to quote $ 1,844.40 an ounce. Payment SI00,
+ 0.27%,
meanwhile, it rose 0.2 percent, or 5 cents, to nearly $ 22 an ounce.

US equities rose, putting stocks on a weekly pace as investors weighed in on the minutes of the Federal Reserve meeting in early May, which boosted expectations that the central bank will shoot a round. of half a percentage point rate hikes this summer to combat inflation. , but then keep monetary policy flexible.

“Higher interest rates hurt gold, even if it doesn’t fit the overall historical picture,” George Milling-Stanley, chief gold strategist at State Street Global Advisors, said by telephone.

But Milling-Stanley also believes there is room for gold to rise, given the strong inflationary pressures of the Russian war in Ukraine and higher labor costs in the U.S., which he hopes will keep the cost of living high in the range. 5% during the year. final.

“This is an opportunity for gold and people who want to invest in gold,” he said, adding that precious metals tend to outperform when inflation stays above 5% for at least a quarter. .

Traders have also been weighing whether Treasury yields could have reached a recent high, especially with the 10-year Treasury rate falling to 2.77% from its high of 3.124% in early May.

Gold prices had risen for four consecutive sessions before ending lower during Wednesday’s session.

Over the past few months and weeks, gold and silver, considered safe haven assets during periods of market volatility, have been moving more in line with “risk” assets such as stocks in recent years. months and weeks, much to the chagrin of some longtime analysts.

Meanwhile, the dollar has captured some of these safe-haven flows, which in turn had helped bring the green dollar to its strongest level in decades, despite the ICE DXY dollar index,
an indicator of the strength of the dollar against a basket of its main rivals, has recently retreated a bit. Some strategists, including Steven Barrow, head of G-10 strategy at Standard Bank, predict that the greenback could begin to weaken.

The risky mood in Thursday’s actions came despite an unfortunate economic warning from China and news that Apple Inc. AAPL,
+ 2.44%
he had told his contractors to assemble iPhones less than expected during the next production cycle.

Other precious metals rose Thursday, up 0.8% from platinum, or nearly $ 7.10, to $ 936.40 an ounce. Palladium was down 0.3% to $ 1,989 an ounce.

Copper HG00,
+ 0.06%
prices were flat to quote at $ 4.26 per pound.

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