Gold's resilience is being severely tested as a break below $4,230, surging Treasury yields, and a stronger dollar have triggered renewed selling, with ETF demand now the only key counterweight, according to Ole Hansen, head of commodity strategy at Saxo Bank.In his latest precious metals analysis, Hansen said that Gold's early-week price action suggests the yellow metal is facing an increasingly severe test of its ability to sustain investment demand in the face of sky-high bond yields.
Gold prices could remain under pressure through the end of the year as rising oil prices, persistent inflation and higher interest rates take their toll on the precious metal, but Natixis believes the outlook could diverge dramatically depending on how the conflict surrounding the Strait of Hormuz evolves.
Gold prices are struggling as persistent inflation pressures drive bond yields higher and force investors to continue to price in a more aggressive Federal Reserve; however, unusually calm equity markets could be providing an important source of support for the precious metal.
Gold prices are trading at session highs after the latest data painted a worsening picture of U.S. consumer sentiment this month.The Consumer Confidence Index fell to 81.9 in September, below economists' consensus forecast for a 89.2 reading and also below the downwardly revised 88.6 print from August, the Conference Board announced on Tuesday.
The gold market appears to be attracting some bullish attention as the U.S. labor market shows further signs of cooling, with the number of available jobs falling to its lowest level since May.
Spot gold and silver prices were higher in early U.S. trading Tuesday, as both metals stabilized after Monday's steep selloff while elevated oil prices, Treasury yields and Fed rate-hike expectations continued to cap the rebound. At the time of writing, spot gold was trading near $4,157.80 an ounce, up 1.06% on the session, while spot silver was trading near $60.770, up 0.40%.
Rising interest rate expectations and surging bond yields have the potential to push gold prices back toward $4,000 an ounce within the next week; however, one strategist expects that floor to hold, and while the path higher has become more challenging, prices could still reach $5,000 within the next six months.
China's 2026 gold imports could be double those of last year, and will set the high-water mark for the 2020 to date, while silver prices are approaching a key test that could determine the gray metal's near-term direction, according to precious metals analysts at Heraeus.
Spot silver fell 4.72% as sellers pushed the metal within 11 cents of the $60.84 50% retracement of its all-time high, with yields and the dollar firm.
Spot gold and silver prices were sharply lower in early U.S. trading Monday, as a rebound in oil prices tightened the inflation narrative and reinforced expectations for another Federal Reserve rate increase. At the time of writing, spot gold was trading near $4,165.00 an ounce, down 2.78% on the session, while spot silver was trading near $61.290, down 4.49%.
Diplomatic impasse over the Iran war kept energy costs elevated, adding to inflation pressures.
Gold and silver extend their losses ahead of US inflation and jobs data, putting gold's $4,200 level and silver's $60 support in focus.