Gold and silver prices retreated on Wednesday as the U.S. dollar strengthened and Treasury yields advanced further beyond the 4% mark.
Price action
-
Gold futures due in December
GCZ23,
-0.96%
fell $18.90, or 1.1%, to $1,636 per ounce on Comex. -
Silver futures due in December
SIZ22,
-1.13%
shed 28 cents, or 1.5%, to $18.32 per ounce. -
Palladium futures
PAZ22,
-2.45%
expiring in December were down $52, or 2.6%, at $1,964 per ounce, while platinum futures expiring in January
PLF23,
-1.87%
shed $20, or 2.2%, to $887 per ounce. -
Copper futures due in December
HGZ22,
-1.04%
fell 4 cents, or 1.2%, to $3.32 per pound.
What’s happening
Precious metals analysts blamed hawkish commentary from Minneapolis Federal Reserve Bank President Neel Kashkari for the weakness in gold and silver prices on Wednesday. In remarks Tuesday afternoon, Kashkari said the Fed may need to hike interest rates past 4.75% to tame inflation.
Comments Kashkari were a stark reminder of the difficult macroeconomic environment gold finds itself in with central banks across the world looking to increase interest rates, further diminishing gold’s appeal due to its lack of yield, wrote Rupert Rowling, a market analyst for Kinesis Money.
The ICE U.S. Dollar Index
DXY,
a gauge of the greenback’s strength against a basket of rivals, rose 0.7% to 112.89.
Meanwhile the yields on the 2-year and 10-year Treasurys moved further past the 4% mark, with the 2-year
TMUBMUSD02Y,
up 5.5 basis points to 4.503% and the 10-year up
TMUBMUSD10Y,
8 basis points to 4.084%.
