Gold prices settled higher Tuesday as global equities staged a modest retreat after being buoyant for weeks on the back of the reopening of economies stricken by the coronavirus pandemic.
Prices for the precious metals found some traction “in the wake of a risk off global trade in equities, official recession labeling for the U.S. economy and because of the market’s capacity to reject sub-$1,700 pricing for a second day in a row,” analysts at Zaner Metals wrote in a daily note.
Against that backdrop, August gold
on Comex rose $16.80, or 1%, to settle at $1,721.90 an ounce, after finishing Monday’s session up 1.3%. Meanwhile, July silver
shed a dime, or nearly 0.6%, to end at $17.794 an ounce, following a 2.4% climb in the previous session.
European stock market suffered declines on Tuesday, and U.S. benchmark stock indexes were mixed, with the Dow Jones Industrial Average
pulling back a bit even as the Nasdaq Composite Index
carved out a fresh record intraday high.
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Gold has seen a return to basics, trading firmly over $1,700 an ounce, on the first day of the U.S. Federal Reserve’s monetary policy meeting, said George Gero, managing director at RBC Wealth Management.
Volatility is expected this week in gold, with “many economic and political headlines to come” and traders anxious about Wednesday’s Fed statement, he said in emailed commentary.
The Fed isn’t expected to announce any changes, and the statement is likely to “reiterate unlimited Fed support and backstop to the U.S. economy and market,” said Jeff Wright, executive vice president of GoldMining Inc.
Investors also eyed weakness in the U.S. dollar, which precious metals are priced in, and a slide in yields of government debt. A weaker dollar can lift appetite for gold from buyers using other currencies and falling yields can boost the appeal of gold which doesn’t offer a coupon.
The U.S. dollar was down 0.3% at 96.35, as gauged by the ICE U.S. Dollar Index
the 10-year Treasury yield
was down nearly 6 basis points at 0.82% as gold futures settled.
Among other metals traded on Comex, July copper
tacked on 1.3% to $2.599 a pound. July platinum
lost 0.07% to $860.60 an ounce, while September palladium
settled at $1,967.10 an ounce, down 3.4%.