Stock Market

Gold edges higher after 5th straight weekly decline

Gold futures bounced modestly Monday, with the yellow metal attempting to find its footing after a fifth straight weekly decline as a fierce dollar rally relented.

Price action
  • Gold for August delivery
    GC00,
    +0.52%

    GCQ22,
    +0.52%

    rose $9.80, or 0.6%, to $1,713.40 an ounce on Comex.

  • September silver
    SIU22,
    +1.57%

    rose 16.6 cents, or 0.9%, to $18.76 an ounce.

  • September copper
    HGU22,
    +4.13%

    rose 7.1 cents, or 2.2%, to $3.305 a pound.

  • October platinum
    PLV22,
    +2.64%

    was up 1.8% at $846.10 an ounce, while September palladium
    PAU22,
    +0.96%

    jumped 2.9% to $1,883 an ounce.

Market drivers

Gold has suffered as the U.S. dollar has gone on a rampage in 2022, with the ICE U.S. Dollar Index
DXY,
-0.98%
,
a measure of the currency against a basket of six major rivals, hitting a 20-year high last week as the euro dipped below parity and the Japanese yen slumped to its weakest since 1998. A strong dollar can be a headwind for commodities priced in the currency, making them more expensive to users of other currencies.

The dollar rally took a breather Monday, with the ICE U.S. Dollar Index off 0.7%, giving gold “the opportunity to recover some of the ground it lost last week,” said Rupert Rowling, market analyst at Kinesis Money, in a note.

The dollar respite came as Federal Reserve officials cooled speculation that the Fed would move to raise interest rates by 100 basis points, or a full percentage point, when they meet next week, signaling they would likely move rates up by 75 basis points for the second straight meeting.

“Nonetheless a strong dollar allied by central banks seeking to continue increasing interest rates presents a challenging environment for gold to make much headway and after the dramatic plunges of recent weeks, it is hard to see how the precious metal can gain sufficient momentum to climb back above $1,800 an ounce,” Rowling wrote.

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