Gold futures experienced a dip on Wednesday, November 15th, primarily impacted by the robust performance of the dollar and the escalating yields on US bonds.
On the market close, gold futures saw a decline of $2.20, marking a 0.11% decrease and settling at $1,964.30 per ounce. Conversely, silver futures demonstrated resilience by climbing 40.60 cents, an increase of 1.76%, ending the day at $23.538 an ounce. Platinum and palladium futures showcased positive movements, rising by $9.20 (1.03%) to close at $902.00 per ounce and by $13.70 (1.33%) to reach $1,040.30 per ounce, respectively.
The ascension of the dollar index against major currencies, recording a 0.32% surge to 104.3930, coupled with the 10-year US government bond yield’s rebound to 4.547%, contributed significantly to gold’s downward trajectory. The appreciation of the dollar renders gold contracts priced in dollars less attractive to investors holding alternative currencies. Moreover, the hike in bond yields amplifies the opportunity cost associated with holding gold, an asset devoid of interest returns.
Despite these adversities, the decline in gold contracts was mitigated by market optimism stemming from expectations of a halt in interest rate hikes by the Federal Reserve. This optimism surfaced following the release of lower-than-anticipated inflation figures by the United States.
The US Department of Labor disclosed October’s Producer Price Index (PPI) data, indicating a 1.3% year-on-year increase in producer spending inflation. This figure fell short of analysts’ projections, trailing behind September’s 2.2% at 1.9%. Concurrently, the Consumer Price Index (CPI) for October recorded a 3.2% year-on-year rise in consumer spending inflation, slightly lower than the predicted 3.3% and down from September’s 3.7%. The CPI serves as a gauge for inflation originating from consumer expenditures.
The collective data echoes a narrative of moderated inflation, providing a backdrop for gold’s fluctuations amidst the complex interplay of currency valuations and bond yields within the financial landscape.
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Thursday, November 16, 2023