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-0.37
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-3.00
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U.S. Dollar Performance
May 23, 2022

Will Precious Metals Continue To Recover Following A Weaker US Dollar?

“Precious metals continued to steadily inch up on Monday morning, starting the week on an optimistic note and rebounding from the mass sell-off seen last week. Gold, silver, platinum and palladium were all up, as the US dollar (DXY), which has been rallying for the last few weeks finally saw a slowdown.

According to Piero Cingari, analyst at Capital.com, “After four weeks of declines, gold and silver have reversed course and gained momentum. Investor positioning on precious metals now is lighter than it was the beginning of the year.Speculators have considerably cut their net long holdings in gold and silver over the past weeks, according to the latest Commitment of Traders (COT) data, but this might also be an indication that selling pressure has eased.

“Rising risks of a recession in the advanced world, owing to a sharp drop in real household incomes due to sticky high inflation, is now undermining the dollar’s strength and giving breathing room to assets such as gold and silver, which have been hit hardest in the past weeks by rising market expectations for Federal Reserve rate hikes.”

In London morning trading, Spot gold inched higher 0.9% to $1861.3 per troy ounce, boosted further by a weakening US dollar (DXY), as well as by a somewhat unexpected rally in equities recently.
Precious metals continued to steadily inch up on Monday morning, starting the week on an optimistic note and rebounding from the mass sell-off seen last week. Gold, silver, platinum and palladium were all up, as the US dollar (DXY), which has been rallying for the last few weeks finally saw a slowdown.

According to Piero Cingari, analyst at Capital.com, “After four weeks of declines, gold and silver have reversed course and gained momentum. Investor positioning on precious metals now is lighter than it was the beginning of the year.Speculators have considerably cut their net long holdings in gold and silver over the past weeks, according to the latest Commitment of Traders (COT) data, but this might also be an indication that selling pressure has eased.

“Rising risks of a recession in the advanced world, owing to a sharp drop in real household incomes due to sticky high inflation, is now undermining the dollar’s strength and giving breathing room to assets such as gold and silver, which have been hit hardest in the past weeks by rising market expectations for Federal Reserve rate hikes.”

In London morning trading, Spot gold inched higher 0.9% to $1861.3 per troy ounce, boosted further by a weakening US dollar (DXY), as well as by a somewhat unexpected rally in equities recently.
Silver rose 1.8% to $22.2 per troy ounce, tracking gold’s footsteps, as the precious metal lingered around almost 2-week highs, following renewed safe haven demand, as geopolitical tensions from the ongoing Russia-Ukraine war continued to plague commodity markets.

US Treasury yields jumped 4.5 basis points to 2.8%, rising stealthily, but still falling short of the over 3% mark seen a few weeks back.

Platinum increased 1.9% to $975.2 per troy ounce, touching close to a one-week high, following recovering demand from the auto manufacturing sector, where the precious metal is used widely in auto catalysts. Falling stock piles of supplies also contributed to the rally, as the metal is likely to reduce its surplus this year.

Palladium has risen 3.96% to $2016.4 per troy ounce, bouncing back from the recent 4-month low seen due to the mass metal sell-off earlier this month, as a recent report from Johnson Matthey (JMAT) highlighted that the precious metal could soon stand to see a deficit this year, due to dwindling South African supplies and Russian sanctions.”

*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.

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