Gold futures closed higher after the dollar hit a 20-year high earlier this week, according to news from the financial world on October 1. But this week, dollar-denominated commodities traded lower this month and this quarter as the U.S. Federal Reserve’s aggressive monetary tightening boosted the dollar as a whole.
Gold futures for December delivery on the New York Mercantile Exchange rose $3.40 to settle at $1,672 an ounce, the highest close since Sept. 22. The most active contract was up 1% for the week but fell 3.1% for the month, its sixth straight monthly decline, and was down 7.5% for the quarter, according to Dow Jones Market Data. December silver futures were up 33 cents at $19.039 an ounce, up nearly 1.8%, up 0.7% for the week and 6.5% for the month but down 6.5% for the quarter.
Palladium for December delivery fell $28.90, or 1.3%, to $2,182.20 an ounce, up nearly 14% for the quarter; platinum for January delivery fell $1.10, or 0.1%, to $859.10 an ounce, down 4% on the quarter . Copper for December delivery was down 1 cent at $3.4125 a pound, down 0.2% and down 8% for the quarter.
Gold prices closed at their highest level in more than a week on Friday, despite another set of worrying inflation data from the euro zone. Data showed the consumer price index was rising at the fastest pace since World War II, just a day after a German inflation report showed a similar picture. Meanwhile, U.S. data showed that the personal consumer price index, a key measure of U.S. inflation, edged up 0.3 percent in August, but it was still the fastest gain in 40 years.
More recently, gold and silver price movements have been largely determined by the relative value of the U.S. dollar and rising U.S. Treasury yields.
Gold’s decline this month and this quarter is indeed tied to a stronger dollar, said Gold Strategy Fund portfolio co-manager Teddy. He also said that if you look at the U.S. dollar index over the last quarter, gold and the U.S. dollar have been moving in opposite directions.
Gold futures based on the most active contract fell nearly 8% in the third quarter, while the ICE U.S. dollar index rose more than 7%. The U.S. dollar index fell below Wednesday’s 20-year high of 114.78 on Friday.
“The dollar is higher because inflation is higher, and the Fed can raise interest rates higher than other developed countries in an attempt to curb inflation, which makes our currency more attractive,” also researched by FlexiPlan Investment Corporation. Director of Ted said. The outlook for gold prices is hard to gauge, he said, but as long as interest rates don’t peak, there is “additional room” for prices to fall further.
Ted stressed that he doesn’t think gold will start to recover until inflation figures drop to a point where the Fed can “release the brakes” and interest rates either “stop” rising or falling — but that will take many months. He said that once there is a clear improvement in inflation, the price of gold will not have much resistance, which may be a good time to buy gold.
Source: Finance WorldReturn to Sohu, see more
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