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Gold prices rallied on Thursday, prompting the commodity to settle above the psychologically significant value of $1,800 an ounce for the first time since February, as slipping bond yields and a slightly weaker U.S. dollar offered some support.
The precious metal’s rise above the key price mark is “quite something for gold,” Ross Norman, chief executive officer at Metals Daily, told MarketWatch.
“Over the last three weeks, it has attempted these levels five times unsuccessfully, which further reinforces the strength of the resistance level,” he said. “The key issue is the nominal 10-year Treasury yields has been edging lower and the real yield looks like it is headed back to -1% once again.”
Meanwhile, “the sharp move higher in silver through the $27 level will also have given gold confidence to move higher,” said Norman.
June gold
GC00,
GCM21,
rose $31.40, or 1.8%, to settle at $1,815.70 an ounce after trading as high as $1,818.60. Prices for the most-active contract marked the highest finish since Feb. 12, FactSet data show.
Getting above the key level of $1,800 is a “positive as it keeps the series of higher highs and higher lows that began in April in place, and the near-term trend to the upside,” said Dan Russo, portfolio manager at Potomac Fund Management.
Gold has been under pressure since August of last year, but it has “begun to improve in the near-term after finding support at an important technical level,” with gold stopping its decline in the $1,670 to $1,690 zone, he said in emailed commentary.
July silver
SIN21,
SI00,
also added 96 cents, or 3.6%, to $27.48 an ounce, with prices posting their highest finish since late February.
Also see: Iron-ore prices hit record high with appetite for steel ‘far beyond expectations’
Gold and silver bulls garnered support from Federal Reserve “assurances of ongoing low rates overnight and the dollar showing a definitive reversal down, wrote analysts at Zaner, in a daily note.
“Fed dialogue over the last 36 hours has partially tamped down the rising rate threat” sparked by Treasury Secretary [Janet Yellen’s] comments earlier in the week calling for the Fed to act, they said.
Read: Fed’s Rosengren says higher inflation will be as temporary as last year’s toilet-paper shortage
On Wednesday, the precious metal bounced back from a Tuesday decline after Yellen, formerly head of the Federal Reserve, clarified remarks that had been interpreted as advocating for raising interest rates to keep the economy from overheating.
The 10-year Treasury note yield
TMUBMUSD10Y,
was lower at around 1.57%, while the U.S. dollar was off 0.4% at 90.977, as measured by the ICE U.S. Dollar Index
DXY,
Commodity traders also parsed the Bank of England’s vote that advocated for slowing the pace of continuing government bond purchases “somewhat.”
By an 8-to-1 vote, the Bank of England said it would maintain its target for U.K. government bond purchases at £875 billion, with only chief economist Andy Haldane, who is going to be leaving the central bank, voting to reduce the size by £50 billion.
In other metals news, separate data released Thursday showed outflows for global gold-backed exchange-traded funds first quarter, and in April.
Global gold ETFs lost 18.3 metric tons in April, marking outflows for five of the past six months, according to the World Gold Council.
Separately, Refinitiv Metals Research said gold ETF investors liquidated 175 metric tons in the first quarter, representing the largest level of net quarterly outflows since the first quarter of 2013.
The outflows were “largely a reflection of a shift in investor sentiment towards gold since the beginning of the year, with gold being pressured by firm U.S. dollar, rising U.S. Treasury yields and growing enthusiasm around economic recovery amidst the ongoing rollout of vaccination [programs],” according to Refinitiv Metals Research.
Rounding out action on Comex, prices for July copper
HGN21,
added 1.7% to $4.60 a pound, with most-active contract prices settling at their highest since February 2011.
Prices continued to benefit from an overall, ongoing global economic recovery. “The uptrend remains well intact for the industrial metal,” analysts at Sevens Report Research said in Thursday’s newsletter.
Read: Electric vehicle market growth is a blessing for some metals — and not a big worry for oil
July platinum
PLN21,
rose 2.3% to $1,257.60 an ounce and June palladium
PAM21,
lost nearly 0.9% to $2,947.40 an ounce.
See: Palladium touches an all-time record above $3,000 an ounce
