Business & Investment

Gold futures are as high as the dollar and end in a month, bond yields fall after inflation reports

Gold futures rose 2% on Wednesday, and US dollar and bond yields fell following the September inflation report, prompting prices to hit a record high in about a month.

Precious metal prices fell slightly on Wednesday afternoon in electronic trading shortly after the minutes were released by the Federal Reserve Board of Governance’s September 21-22 monetary policy meeting.

Inflationary pressure continues to rise, according to Colin Siezinski, chief market strategist at SIA Wealth Management. Has been done. ”

“Gold’s role as an inflation hedge has returned to the forefront as signs of inflation likely to be non-temporary emerged between rising commodity prices and price inflation,” he told MarketWatch. The weaker US dollar also helped bring gold a tailwind, according to Cieszynski.

NS September usa Consumer price index readings rise Expected to be 0.4% and 0.3% against the month. Excluding volatile food and energy components, the CPI rose 0.1% in August, then 0.2%, the lowest in six months.

For the 12 months to September, the CPI rose 5.3% year-on-year in August, then rose 5.4%, and the annual core CPI rose 4.0% in August, then 4.0%.

“With the acceleration of the CPI in this CPI report, the Fed is taking action to keep inflation urgent and imminent,” Prestige Economics Governor Jason Schenker said in an email commentary. Stated. He also said he hopes the Fed will raise interest rates next year.

Quantitative easing tends to underpin gold prices, but it is widely expected that the Fed will begin declining monthly bond purchases next month.

Against such a background, December Friday
GC00,
+ 1.91%

GCZ21,
+ 1.91%

GC00,
+ 1.91%

After rising 0.2% on Tuesday, it rose $ 35.40 (2%) to settle at $ 1,794.70 an ounce. The prices of the most active contracts marked the highest settlement since September 15. FactSet data shows.

Meanwhile, December delivery silver
SIZ21,
+ 2.78%

SI00,
+ 2.78%

Following a 0.7% drop a day ago, it rose 66 cents (2.9%) to settle at $ 23.17 an ounce on Wednesday. The price also ended at the highest price since September 15.

Chintan Karnani, Research Director at Insignia Consultants, said:

“The central bank’s tolerance for hyperinflation will be tested this quarter,” he said, adding that there was a technical breakout at $ 1,781 in gold, with a short cover.

In electronic trading shortly after the release of the Fed minutes on Wednesday, gold prices fell slightly to $ 1,793.50.

The Fed’s minutes in September confirmed that it was released about 30 minutes after gold futures were settled on Comex and that central banking authorities had discussed plans to reduce the pace of asset purchases by $ 15 billion per month.

Second Richard of the Federal Reserve Board Clarida had already signaled earlier this week The economic recovery from COVID-19 essentially met the criteria needed to announce a reduction in monthly asset purchases of government bonds and mortgage-backed securities in force after June 2020.

The Fed’s minutes will be key to Thursday’s deal, according to Karnani.

Until Wednesday, gold recorded mostly small losses and was trading in a relatively narrow range between $ 1,750 and about $ 1,770 per ounce. Gold bulls point out that precious metals remain relative strong despite the strong US dollar and steady rise in Treasury benchmark yields.

“At the Commodity Complex, gold has shown incredible resilience in recent sessions, successfully absorbing the strong dollar and spikes in yields,” said Marios Hadjikyriacos, senior investment analyst at XM.

However, for Wednesday transactions, the dollar as measured by the ICE US Dollar Index
DXY,
-0.43%

Decreased by 0.5% at 94.068 10-Year Government Bond Yield
TMUBMUSD10Y,
1.548%

It fell from 1.579% on Tuesday to 1.548%.

December copper in other Comex deals
HGZ21,
+ 4.16%

4.4% to $ 4.516 a pound, the best finish since July. January platinum
PLF22,
+ 0.93%

1.2% increase to $ 1,024.20 an ounce, Palladium in December
PAZ21,
+ 2.96%

Settled at $ 2,106.10 per ounce, up nearly 2.9%.

“There is a big backlash between copper and industrial metals … about concerns about supply pressure,” Karnani said.

Gold futures are as high as the dollar and end in a month, bond yields fall after inflation reports

http://www.marketwatch.com/news/story.asp?guid=%7B20C05575-04D4-B545-76C0-2AAA212B50E0%7D&siteid=rss&rss=1 Gold futures are as high as the dollar and end in a month, bond yields fall after inflation reports

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