This post was originally published on this site
Gold prices struggled to gain ground on Thursday, after touching their lowest levels in a week and posting declines over the past two sessions on the back of jitters centered on rising inflation.
“With gold and silver prices faltering in the wake of the hottest U.S. CPI month over month gain since 2009, it is clear that precious metals are still not in a position to benefit from rising inflation,” analysts at Zaner wrote in Thursday commentary.
On Wednesday, the data revealed that U.S. consumer-price index soared 0.8% to match the biggest monthly increase since 2009, leading to a rise in U.S. Treasury yields and the dollar. The rate of inflation over the past year jumped to 4.2% from 2.6% in the prior month—the highest level since 2008.
“The precious metal trade could be accepting the [Federal Reserve’s] view that inflationary pressures will be transitory, and clearly there are other forces applying pressure to gold and silver prices,” the analysts at Zaner said. “Rising interest rates and a stronger dollar knocked the legs out from under gold and silver prices [Wednesday], proving that outside market forces are the key driving force of action in precious metal markets.”
An overall resurgence in yields for U.S. government bonds to their highest levels in weeks and a perkier U.S. dollar, on the back of fears of pricing pressures building in the aftermath of the COVID pandemic, have been part of the recent drag on the precious metal, analysts have said.
In Thursday dealings, however, the 10-year Treasury note
TMUBMUSD10Y,
eased back a bit to 1.68% in Thursday dealings, while the ICE U.S. Dollar Index
DXY,
was down less than 0.1%.
June gold
GCM21,
GC00,
tacked on 40 cents, or less than 0.1%, at $1,823.20 an ounce on Comex, after touching a low at $1,808.40, the lowest intraday level since May 6. A decline on Thursday would mark the longest skid for the most-active gold contract since a four-session slump ended April 30, FactSet data show.
July silver
SIN21,
edged down by 0.5% to $27.11 an ounce.
Gold futures pared some of their early losses after data Thursday showed that U.S. wholesale prices increased sharply in April, with the producer price index up 0.6% for the month and 6.2% for the year.
Separately, initial U.S. jobless claims dropped 34,000 to 473,000 in the seven days ended May 8, the government said Thursday. It was the fifth decline in a row.
Most other metals traded on Comex moved lower Thursday. July copper
HGN21,
fell 0.5% to $4.71 a pound and July platinum
PLN21,
lost 0.7% to $1,217.80 an ounce. However, June palladium
PAM21,
added 0.9% to $2,875 an ounce.
