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Metals Stocks: Gold futures inch lower but remain stuck in range


Gold prices inched higher on Tuesday, but remained mired in a range between $1,800 and $1,880 — a range that has held since mid-May.

Price action

Gold futures

expiring in August gained $1.10, or 0.2%, to $1,826 per ounce.

Silver futures

expiring in July rose five cents, or 0.1%, to $21.22 per ounce.

Palladium futures

expiring in September rose $5.20, or 0.3%, to $1,850 an ounce.

Platinum futures

expiring in July rose $20, or 2.2%, to $920 an ounce.

What analysts are saying

Commodities analysts at Commerzbank attributed Tuesday’s move in gold prices to the rebound in Treasury yields. Bond yields move inversely to prices, and higher yields make gold a less attractive investment by comparison, since buyers of bonds can at least pocket some yield in the form of coupon payments.

Outflows from gold and silver exchange-traded funds also weighed on the precious metals complex.

 “Another sizeable outflow from ETFs presumably also put pressure on gold: holdings in the gold ETFs tracked by Bloomberg were reduced by a good 6 tons yesterday. The momentum of outflows has picked up pace again of late,” wrote Daniel Briesemann, a Commerzbank precious metals analyst.

Suki Cooper, executive director of precious metals research at Standard Chartered, said gold has been caught in a range as investors digest signs of slowing economic growth, rising inflation and the threat of more aggressive interest-rate hikes from the Federal Reserve.

“Gold has been caught within an increasingly narrower range as it toys between risk of faster rate hikes, and prolonged elevated inflation and slower growth,” Cooper said.

Other markets

The yield on the 10-year Treasury rose three basis points to 3.22%.

U.S. stock futures were headed for a higher open as Dow futures

were on track to rise more than 60 points at the open.

The U.S. dollar climbed

against a basket of its rivals.

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