Gold ticks higher but dollar strength constrains gains; platinum retreats
Gold traded modestly higher on Tuesday as the precious metal recovered from back-to-back losses.
Price action
-
Gold futures
GC00,
+0.16%
were up 0.4%, or about $7, to $1,851 per ounce. -
Silver
SI00,
-0.69%
was off 0.2%, or about five cents, to trade at $22.05 per ounce. -
Platinum
PL00,
-1.94%
was down 1.6%, or $16, to $1,013. -
Palladium
PA00,
-0.13%
climbed 0.5% to $1,985. 70.
In other markets, the U.S. dollar traded higher against a basket of its main rivals
DXY,
while climbing to a fresh 20-year high against the yen
USDJPY,
at more than 132 yen to the dollar. U.S. stock futures
DJIA,
traded lower as all three main benchmarks appeared headed for a lower open.
What analysts are saying
Analysts with Kitco attributed gold’s modest gains to “bargain hunting” following the yellow metal’s recent move toward $1,800 per ounce. They also cited weaker U.S. stocks and stubborn inflation worries as reasons for the move.
However, commodities analysts with Commerzbank added that gold’s move to the upside was being constrained by the dollar’s strength against a basket of its main rivals and the 10-year Treasury yield holding above the 3% threshold.
Avatrade’s Naeem Aslam added that trading in precious metals was largely lackluster ahead of the U.S. May inflation data due Friday.
“The biggest denominator for the price action remains the US inflation reading which is not due until Friday,” he said.
The Commerzbank team was puzzled by the recent pullback in platinum prices, as recently released supply data reflected unexpected tightness, which in theory should have bolstered prices, although the price of platinum has risen much more substantially than gold and silver over the last month.
“In our view, however, the news backdrop should if anything have lent support to the price,” the Commerzbank team wrote.
