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Futures for gold on Wednesday finished solidly higher as precious metals traded against a backdrop of a weaker U.S. dollar and steady benchmark government bond yields.
The competing factors for bullion—dollar weakness that has provided recent support and rising debt yields that can undercut appetite for haven metals—has gold values hemmed to a relatively tight $1,800-$1,900 range around in December.
The U.S. currency as measured by the ICE U.S. Dollar index DXY, -0.37%, a gauge of the unit against a basket of a half-dozen currencies, was trading, off 0.3%, at 89.707, representing its lowest level since April of 2018. Meanwhile, the 10-year Treasury note yield TMUBMUSD10Y, 0.926% was holding around 0.94%, offering some potential competition for investors seeking safe-haven assets, wrote Marios Hadjikyriacos, investment analyst at XM, in a daily note.
Against that backdrop, gold for February delivery traded $10.50, or 0.6%, higher to settle at $1,893.40 an ounce, following a 0.1% gain on Tuesday.
Gold’s moves on Wednesday inspired some bullish outlooks for the haven asset among those hoping that it will soon break out of its rangebound trade.
“Gold’s bearish correction could be over now that prices are poised to have its first monthly gain since July,” wrote Edward Moya, senior market analyst at Oanda, in a Wednesday research note.
He also noted that the next point of concern for market participants—one that is likely to provide support for precious metals—is Senate races in Georgia that could help to determine whether Democrats or Republicans hold a majority in Congress, influencing the prospects for further fiscal stimulus.
Additional coronavirus aid under the administration of President-elect Joe Biden is also expected to help boost the dollar and potentially weigh further on dollars.
“Gold traders will closely watch the Georgia Senate runoff races that could deliver a surprise blue wave for the stimulus trade,” Moya wrote.
Silver futures for March delivery SIH21, +1.92%, meanwhile, were trading 35.6 cents, or 1.4%, higher to end at $26.573 an ounce, after a 1.2% gain in the prior session.
Commodity markets were little-changed after a report in U.S. trade deficit in goods showed a climb to $84.8 billion in November from $80.4 billion in the prior period. A separate report on advanced U.S. inventories showed a rise of 0.7% in retail November, while U.S. wholesale inventories dipped 0.1% on the month.
In other metals dealings, March copper HGH21, -0.28% shed a little over half a penny, or 0.1%, to settle at $3.549 a pound, following a 0.4% decline on Tuesday.
April platinum PLJ21, +1.68% picked up $15.90, or 1.5%, to settle at $1,078.50 an ounce after a 1.3% gain a session ago, while March palladium PAH21, +1.18% rallied $34.10, or1.5%, to end at $2,378.40 an ounce, following its 0.3% retreat in the prior day.
