Metals Stocks: Gold futures end higher after back-to-back declines

Gold futures settled marginally higher on Tuesday to log their first gain in three sessions, as investors assessed demand for the yellow metal amid worries about the spread of the delta variant of the coronavirus, which roiled financial markets Monday. “The yellow metal has been well supported in recent weeks and that could continue as long as policy makers hold their nerve in the face of higher inflation,” said Craig Erlam, senior market analyst at Oanda, in a marke tupdate. “The environment remains highly accommodative but challenges remain in the final months of the year, which may encourage patience and continue to be supportive for gold prices.”

August gold

edged up by $2.20, or 0.1%, to settle at $1,811.40 an ounce on Comex after trading as high as $1,825.90. Prices had lost 0.3% on Monday. July silver
fell 15 cents, or 0.6%, to settle at nearly $25 an ounce. “In recent days, we have seen bond yields come under renewed pressure as investors have rushed back to the perceived safety of government bonds, driving their prices higher,” said Victor Argonov, senior analyst and economist at EXANTE, in a market update, citing concerns over the spread of the delta variant of COVID as the likely reason for the rise in bonds.   The yield on the 10-year Treasury note BX:TMUBMUSD10Y has fallen to its lowest since mid-February, and continued to decline after a round of mixed data on U.S. housing. When bond yields fall, “this reduces the opportunity cost of holding gold and silver as the metals pay no interest or dividend, and cost money to store,” Argonov said, noting that should be supportive for precious metals prices. “But it hasn’t played out this way, thanks to the dollar’s strength.” Gold futures remain lower for the week despite Monday’s rise, as the ICE U.S. Dollar Index
headed up by 0.1% in Tuesday dealings, contributing to a week-to-date rise of almost 0.4%. Still, “if the weakness for bond yields persists, the stage is set for gold to stage a [comeback] in the not-too-distant future,” said Argonov. Other metals traded on Comex were mixed, with September copper
added 1.5% to $4.26 a pound, following a 2.8% fall Monday. October platinum
shed 0.6% to $1,065.20 an ounce, while September palladium added 1.8% to $2,640.40 an ounce.



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