Explore Monex
U.S. Dollar Performance
August 4, 2022

How are the dollar and U.S.-China tensions affecting precious metals?

“Gold prices climbed over 1% to hit a fresh one-month peak on Thursday underpinned by a retreat in the dollar and U.S. Treasury yields, and as investors kept a close tab on U.S.-China tensions.

Spot gold was up 1.1% to $1,784.70 per ounce at 10:47 a.m. EDT (1447 GMT), having risen to its highest since July 5 earlier. U.S. gold futures jumped 1.5% to $1,803.50 per ounce.

“As of late, yields are coming down slightly, that has been along with the dollar’s recent weakness one of the key benefits to gold,” said David Meger, director of metals trading at High Ridge Futures.

The dollar’s retreat bolstered gold’s appeal among overseas buyers, while benchmark U.S. Treasury yields also slipped, reducing the opportunity cost of holding non-yielding bullion.
“We’ve seen some rising tensions between the U.S. and China, so one additional reason why gold has been well supported coming into the morning,” Meger added.

China fired multiple missiles near Taiwan in its biggest ever military drills in the Taiwan Strait, a day after U.S. House of Representatives Speaker Nancy Pelosi visited the self-ruled island.

Investors also took stock of data which showed the number of Americans filing new claims for unemployment benefits increased last week. Investors are now eyeing the U.S. non-farm payrolls report due on Friday.

“However, with nonfarm payrolls headlining the week tomorrow, our expectations of a stronger-than-anticipated report could quickly put a cap on the prevailing bullishness among gold bugs,” TD Securities wrote in a note.

Elsewhere, spot silver rose 0.5% to $20.13 per ounce.
“Short covering in the futures market and some fresh chart-based buying are also featured today, as the near-term technical postures for both metals (gold and silver) have improved this week,” Jim Wyckoff, senior analyst at Kitco Metals, wrote in a note.

Platinum rose 3% to $924.87 per ounce, and palladium climbed 3.1% to $2,079.20.”

*This information is solely an excerpt of a third-party publication and is incomplete. Please subscribe to the referenced publication for the full article. This is not an offer to buy or sell precious metals. Investors should obtain advice based on their own individual circumstances and understand the risk before making any investment decision.

See What Investors are Saying About Monex

Thank You!
Want your kit sooner?
Faster delivery is available by phone.
Get Your Free Report

A Better Future
with Precious Metals

  • All form fields are required

  • Privacy Policy
  • This field is for validation purposes and should be left unchanged.
Download Your Report