Gold on Tuesday fell below the key $1,800-an-ounce level to settle at its lowest price so far this year, while silver futures ended at a two-year low, on back of a rise in the U.S. dollar index toward a 20-year high.
- Gold prices for August GCQ22, -2.06% GC00, -2.06% delivery dropped $37.60, or 2.1%, to settle at $1,763.90 an ounce after touching a low at $1,763. Prices for the most-active contract marked their lowest finish since early December, FactSet data show.
- Silver prices for September delivery SIU22, -3.11% settled at $19.121 per ounce, down 55 cents, or 2.8% — at their lowest since July 2020.
- Palladium prices for September PAU22, -1.22% delivery declined $19.30, or 1%, to $1,918.80 per ounce.
- Platinum prices for October PLV22, -2.25% delivery dropped $20.60, or 2.4%, at $850.70 per ounce.
- Copper prices for September delivery HGU22, -5.19% fell 19 cents or 5.2%, to $3.415 per pound.
What analysts are saying
Naeem Aslam, chief market analyst at AvaTrade, blamed the dollar’s moves for driving price action in gold.
The greenback EURUSD, -1.57% traded at a new 22-year high against the euro on Tuesday, with one dollar buying roughly 1.03 euros. The ICE U.S. Dollar index DXY, +1.40% was up 1.5% at 106.66, trading around the highest levels since November 2002.
Minutes from the Federal Reserve Open Market Committee’s June meeting, due out on Wednesday, as well as the monthly data on U.S. nonfarm payrolls, due Friday, are the “two most important events for the yellow metals, which are likely to bring significant volatility to the price,” said Aslam, in market commentary.
Meanwhile, Jim Wyckoff, senior analyst at Kitco.com, said technical indicators in recent trade for both gold and silver are now “fully bearish.”
“The metals are feeling the pressure of a stronger U.S. dollar index that notched a 20-year high overnight,” Wyckoff added.
At the current prices, gold and silver are “good long-term bargains,” but on a short-term basis, traders will need to “wait and watch,” said Chintan Karnani, director of research at Insignia Consultants.
He said he has advised his clients to use the price crashes in gold and silver, ahead of the release of the nonfarm payrolls data on Friday, to “go long or invest with a stop loss below the week’s low.”