The financial world on May 11 reported that gold futures closed at a three-month low and silver futures hit a nearly two-year low as a surge in the dollar and a slump in the stock market boosted the appeal of safe-haven assets.
Gold for June delivery fell $17.60, or nearly 1%, to settle at $1,841.00 an ounce on the New York Mercantile Exchange, the lowest settlement for the most-active contract since Feb. 10, 2022, Dow Jones market data showed. July silver fell 1.8% to settle at $21.424 an ounce, the lowest close for the most active contract since July 20, 2020.
The ICE U.S. Dollar Index (DXY) rose 0.23% on Tuesday, continuing to hold its highest level in nearly 20 years. A rising dollar is bad for commodities such as dollar-denominated gold, because a rising dollar makes gold more expensive relative to users using other currencies.
“In the currency space, the U.S. dollar has reached levels not seen in 20 years amid rising risk aversion and U.S. Treasury yields,” FXTM senior research analyst Lukeman Otunuga wrote in emailed comments on Tuesday. , which was above 3.2% for the first time since 2018. Commodities also tumbled as investors searched for sell buttons across all asset classes. Gold may continue to face headwinds from a rising dollar, rising Treasury yields and Fed rate hike bets factor.”
The yield on the benchmark 10-year U.S. Treasury note retreated from a multi-year high to around 2.99% on Tuesday. Volatility in interest rates this year has been a major source of pain for financial markets as the Federal Reserve prepares to raise rates aggressively in the coming months to reduce the high cost of living.
U.S. stocks were choppy on Tuesday, with the Dow Jones Industrial Average up 0.5% and the S&P 500 up 1.1% after both briefly turned lower. Analysts said inflation data due on Wednesday could be the main event on the economic calendar.
“Gold could face further downside risks as inflation data unexpectedly rises, in this case above 8.1%, which could strengthen the case for the Fed to tighten the pace,” Ricardo Evangelista, senior analyst at ActivTrades, said in a note. , and further push the dollar up.
In other metals trade, July copper fell 0.9% to settle at $4.1545 a pound. Platinum rose 0.9% to $947.20 an ounce in July and palladium fell 0.9% to $2,043.70 an ounce in June.
Source: Finance WorldReturn to Sohu, see more
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