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Gold slipped to its weakest level in nearly a year on Friday despite a pullback in the U.S. dollar and Treasury yields as the precious metal heads for its fifth straight weekly drop.
Meanwhile, copper tumbled to its weakest level in 20 months as recession fears continued to weigh on industrial metals prices.
Price action
-
Gold prices
GC00,
+0.03% GCQ22,
+0.03%
for August delivery were slightly lower at $1,705 per ounce. -
Silver prices
SIU22,
+1.51%
for September delivery were modestly higher, gaining 11 cents, or 0.6%, to $18.34 per ounce. -
Platinum futures
PLV22,
+1.26%
for October delivery rose $3.40, or 0.4%, to $820 per ounce. -
Palladium futures
PAU22,
-2.69%
for September delivery shed $35, or 1.9%, to $35.60. -
Copper futures
HGU22,
-0.84%
for September delivery were down 4 cents, or 1.3%, to $3.17 per pound.
What analysts are saying
A team of commodity strategists at UBS downgraded their gold forecasts on Friday. They now expect the yellow metal to trade as low as $1,600 per ounce by the end of 2022, before staging a slight recovery in 2023.
“We think it’s too early to buy gold at current levels and still advise protecting existing positions. We see opportunities to be more positive in 2023,” the UBS precious metals team wrote in a note to clients.
They also downgraded their forecast for platinum, which has fallen sharply over the past two months to its weakest level since 2018.
“A combination of factors have weighed on platinum: A lower gold price and high energy prices, and a potential cut to Russian gas exports to Europe, increasing the risk of Europe heading into a recession which would hurt platinum demand given Europe accounts for about 20% of platinum demand,” the UBS team wrote.
Meanwhile Peter Boockvar, chief investment officer of Bleakley Advisory Group, blamed weaker-than-expected GDP data out of China for the further fall in the prices of copper and other industrial metals. According to the data, which was released late Thursday night, the Chinese economy grew by just 0.4% during the second quarter, which was marred by COVID-inspired lockdowns in Shanghai and elsewhere. According to FactSet, economists had expected growth of at least 1.7%.
The ICE U.S. Dollar Index
DXY,
a gauge of the greenback’s strength against a basket of rivals, was off 0.3% at 108.26, although it remains just below its strongest level since 2002. The 10-year Treasury yield
TMUBMUSD10Y,
was down 2.3 basis points at 2.937%.
