Gold prices slid further on Tuesday, settling at their lowest levels in more than a month, as the Treasury yields and the U.S. dollar climbed following the release of official data showing a surge of sales by American retailers in July.
Price action
-
Gold futures for December delivery
GC00,
+0.37% GCZ23,
+0.37%
were off by $8.80, or 0.5%, to settle at $1,935.20 per ounce on Comex. That was the yellow metal’s lowest settlement since July 10 when it settled at $1,931, according to FactSet data. -
Silver futures for September delivery
SI00,
+0.70% SIU23,
+0.70%
declined by 5 cents, or 0.2%, to end at $22.66 per ounce. -
Palladium futures for September delivery
PA00,
+0.82% PAU23,
+0.82%
fell by $34.30, or 2.7%, to finish at $1,238.60 per ounce, while platinum futures for October delivery
PL00,
+0.65% PLV23,
+0.65%
declined by $14.60, or 1.6%, to settle at $892.20 per ounce. -
Copper futures for September delivery
HG00,
+0.07% HGU23,
+0.07%
declined by 6 cents, or 1.6%, to $3.67 per pound.
Market drivers
Prices of the yellow metal slid further on Tuesday, building on earlier losses, following the release of better than forecast retail-sales data showing U.S. retailers had a strong July, mostly due to the impact of Amazon Prime Day.
Sales at U.S. retailers rose 0.7% in July and posted the biggest increase in six months. They had been forecast to rise 0.4%.
See: Amazon Prime Day helps deliver biggest gain in U.S. retail sales in six months
“Gold has been steadily declining since the middle of July and that bearish trend looks like it isn’t quite over as king dollar returns,” said Edward Moya, senior market analyst at OANDA, in emailed commentary.
Gold has suffered over the past month as the greenback has climbed while global bond yields have risen. The yield on the 10-year Treasury note
BX:TMUBMUSD10Y
rose to its highest intraday level since November on Tuesday, up 4 basis points to 4.229%. The ICE U.S. Dollar Index
DXY,
fell by 0.1% to 103.13.
“The DXY has risen to the 200-day moving average, a long-term trend indicator,” said Alex Kuptsikevich, the FxPro’s senior market analyst. “Further growth with consolidation above 103.2 will show that the downtrend has been broken and that the growth impulse to the 105.3-107.5 range will begin in the coming months.”
However, Kuptsikevich said betting on further dollar strength seems “premature” before an upward reversal is confirmed as the “next few days” will determine whether the dollar will decide to break its almost year-long downtrend or remain within its framework, he said in emailed commentary on Tuesday.
That’s why Wednesday’s release of the minutes of the last Federal Reserve policy meeting could provide an important clue as to the direction of travel, and it is more likely that the greenback’s path will be determined at the end of next week during the Fed’s Jackson Hole symposium, Kuptsikevich said.
A stronger dollar makes gold more expensive for buyers using other currencies since the yellow metal is typically priced in dollars. Rising bond yields make bonds a more compelling investment relative to precious metals by boosting returns for investors, while gold offers no yield.
Earlier, China’s central bank delivered surprise policy easing by cutting a set of policy interest rates after more weak economic data on retail sales and industrial production in the world’s second biggest economy in July.
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