Gold futures closed higher on Tuesday (May 17), helped by the depreciation of the dollar, whereas U.S. Treasury bond yields rose. Concerns about an accelerated rate hike by the Federal Reserve (Fed) have slowed buying in the market.
- The gold futures were up $4.9, or 0.27%, at $1,818.9 per ounce.
- Silver futures were up 19.9 cents, or 0.92%, at $21.75 an ounce.
- The platinum contract was up $18.1, or 1.96%, at $943.4 per ounce.
- The palladium futures rose $29.60, or 1.48 percent, at $2,032.20 an ounce.
Gold futures closed with gains for the second day in a row after the dollar index fell 0.79% to 103.3620 against six major currencies in a basket of currencies. However, the positive momentum in the gold contract was eroded later in the day when the yield on 10-year U.S. Treasury bonds rose again to 2.962%.
In addition, gold contracts were also pressured by fears that the Fed will accelerate interest rates to curb inflation. This led the SPDR Gold Trust, the world’s largest gold exchange-traded fund, to reduce its gold holdings to the lowest level since early March.
The CME Group’s FedWatch tool indicates that investors are now 100% confident that the Fed will raise rates by at least 0.50% at two more monetary policy meetings in June and July. The Fed had already raised rates by 0.50% in May, which was the largest rate hike in more than 20 years.
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Wednesday, May 18, 2022