The Magazine for Asian Investors
Gold futures closed higher Wednesday (Sept. 7) on a weaker dollar and a drop in U.S. Treasury bond yields. Concerns about a global recession also prompted investors to buy gold as a safe haven.
- The gold futures were up $14.9, or 0.87%, at $1,727.8 per ounce. This is the highest closing level since Aug. 30.
- Silver futures were up 35.2 cents, or 1.97%, at $18.26 an ounce.
- The platinum contract was up $13.3, or 1.59%, at $847.2 per ounce.
- The palladium futures rose $49.60, or 2.5%, at $2,022.80 an ounce.
The dollar index against the six major currencies in a basket of currencies fell 0.34% to 109.8400, while the yield on the 10-year U.S. Treasury bond fell to 3.282.
A weaker dollar will make gold contracts cheaper for holders of other currencies. The decline in yields on U.S. Treasury notes will lower the opportunity cost of owning gold. This is because gold is an asset that does not yield interest.
With signs of recession in many countries, investors are also buying gold as a safe haven. The China Customs Administration (GAC) reported that China’s exports rose only 7.1% in August, a significant slowdown from the 18% increase in July, which was due to the lockdown measures and inflation. As a result, demand for Chinese products abroad has declined. At the same time, imports rose by only 0.3% in August, slower than in July, when they increased by 2.3%.
The Spot Market is Open
Thursday, September 8, 2022