Gold futures are up slightly but close below their highest intraday level of last week

Gold futures rallied slightly on Wednesday, but closed below an intraday high, the highest since last week, as investors watched the omicron coronavirus case develop and awaited US inflation data due later in the week.

At the moment, there is “no real demand for asylum,” given that US President Joe Biden and Russian President Vladimir Putin discussed the Ukraine crisis, but “nothing has changed,” Jeff Wright, chief investment officer at Wolfpack Capital, told MarketWatch.

“The recent risk appetite in equity markets has suppressed the momentum for gold in the short term,” he said. Gold had “several chances” to break through and hold on to the $ 1,800 level, but it failed again.

Wright said he will focus on Friday’s US CPI data and the Federal Reserve’s monetary policy meeting Dec. 14-15. “The gold market needs more clarity” on the Fed’s rate of contraction. purchase of assets, and also “to determine the timing of the increase in interest rates in 2022.”

On Wednesday, the most active February gold contract is GCG22,
-0.46%

GC00,
-0.46%
rose 80 cents, or less than 0.1%, to $ 1,785.50 an ounce. According to FactSet, the contract price in trading on Wednesday was $ 1,794.30, the highest intraday level for the most active contracts since December 1. Prices rose 0.3% on Tuesday, reaching their highest since November 26.

Meanwhile, March silver SIH22 fell 9 cents, or 0.4%, to $ 22.432 an ounce after rising 1.2% on Tuesday.

“Gold appears to be struggling to achieve any momentum in either direction,” and prices near the $ 1,780 level looked like a magnet ”in deals on Wednesday, said Ross Norman, CEO of Metals Daily. “The markets are pretty sluggish at the beginning of December, and it follows that we are doing something that is counterintuitive, and this refers to some accounting for results ahead of the end of the year.”

But also ahead of the end of the year, “traders will be considering whether there is any prospect of deeper restrictions as the omicron variant spreads,” he told MarketWatch. “Now is not the right time to short gold.”

“Traders will be considering whether there is any prospect of deeper restrictions as the omicron variant spreads. Now is not the right time to short gold. ”


– Ross Norman, Metals Daily

Pfizer PFE,
-0.62%
and BioNTech SE BNTX,
-3.55%
said Wednesday that the third dose of their COVID-19 vaccine neutralized the omicron in preliminary laboratory tests, but the two-dose regimen was far less effective.

The report is sparked by investor concerns about the effectiveness of treatments and vaccines against a new variant of the coronavirus, which scientists fear may elude drugs due to its mutations in the spike protein, which is the target of most vaccines.

Pandemic fears helped prop up gold prices, but the commodity has been halted in anticipation of the Fed taking a more aggressive approach to tightening monetary policy, which will put pressure on yield-sensitive gold.

The yield on 10-year Treasury bonds TMUBMUSD10Y rose above 1.5% on Wednesday,
1.488%,
but the US dollar, as measured by the ICE US Dollar Index DXY,
+ 0.25%,
decreased by 0.5%, which gave some ground for the growth of prices for gold and other precious metals, valued in the national currency.

Changes in Treasury and dollar yields, the pandemic and the Fed have led to an unstable trading environment. Volatile markets can provide a playground for bullion.

But “it’s hard to find direction for the precious metal right now as markets remain volatile,” wrote Ricardo Evangelista, senior analyst at ActivTrades, in a daily research article.

In other deals with Comex, March copper HGH22,
-1.87%
rose 1.2% to $ 4.321 a pound. January Platinum PLF22,
-1.68%
rose 0.6% to $ 955.90 an ounce, and March palladium PAH22,
-2.29%
to close at $ 1,852.40 an ounce, an increase of 0.3%.

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