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Metals Stocks: Gold tallies back-to-back gains as U.S. dollar softens

Gold futures climb Wednesday for a second session in a row, finding support as the strength in the euro pressured the dollar, boosting the metal’s appeal, even as benchmark U.S stock indexes stage a recovery from a technology-inspired downturn that took the broader market to their lowest levels in weeks. Read More...

Gold futures shook off early losses Wednesday to move higher for a second session in a row, finding support as the strength in the euro pressured the U.S. dollar, boosting the dollar-denominated metal’s appeal.

The move for gold came even as benchmark U.S stock indexes staged a recovery from a technology-inspired downturn that took the broader market to their lowest levels in weeks and the Nasdaq Composite COMP, +2.64% into correction territory.

“Gold and silver prices had been under some pressure of late, due among other things to concerns over a slower recovery in demand but mainly because of the rebound in the U.S. dollar,” said Fawad Razaqzada, market analyst at ThinkMarkets. “However, as bond yields have remained low, the selling pressure for gold and silver have not been too strong.”

“Investors remain hopeful that an effective vaccine will soon become available and convinced that, in any case, central banks and governments will be ready to provide more stimulus and debase their currencies,” he said in a market update. “Against this backdrop, gold and silver remain fundamentally supported.”

December gold GCZ20, +0.59% GC00, +0.59% was up $9.30, or 0.5%, at $1,952.50 an ounce after trading as low as $1,926.30. Prices rose 0.5% rise on Tuesday, which brought the most-active contract to its highest finish since Sept. 2.

December silver SIZ20, +0.45% SI00, +0.45%, meanwhile, added 8 cents, or 0.3%, at $27.07 an ounce, following a 1% gain in the previous session.

The dollar weakened, as measured by the ICE U.S. Dollar Index DXY, -0.18%, which fell by 0.3% to 93.188, as the euro EURUSD, +0.24% rose to session highs, up 0.4% to $1.1821 after Bloomberg News reported that some policymakers of the European Central Bank “have become more confident in their economic forecasts.” The story, citing sources familiar with the matter, comes ahead of the ECB decision on Thursday, when new staff forecasts are due.

“Expectations are growing among analysts that the ECB will provide a dovish assessment of the economy and in doing so trigger speculation that more QE would be on the way later in the year,” said Razaqzada. “If so, gold and silver should benefit on the back of potentially more weakness for European bond yields.”

Among other metals traded on Comex Wednesday, December copper HGZ20, +0.99% tacked on 0.6% to $3.042 a pound. October platinum PLV20, +1.53% rose nearly 1.4% to $922.60 an ounce, but December palladium PAZ20, +0.67% edged down by 0.1% to $2,303 an ounce.

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