Gold Prices Retreat as U.S. Dollar Strengthens

On Tuesday, gold prices experienced a decline due to the strength of the U.S. dollar, causing pressure on precious metals. Traders were eagerly anticipating the release of the latest inflation data from the U.S.

Price Action

• Gold for December delivery (GC00, -0.75% GCZ23, -0.75%) fell by $14.60, representing a decrease of 0.7%, and reached $1,932.60 per ounce on Comex.
• December silver (SIZ23, -0.76%) also experienced a decline of 14 cents, or 0.6%, and reached $23.24 per ounce.
• Platinum for October delivery (PLV23, +0.32%) fell by $1, or 0.1%, to $901.10 per ounce, while December palladium (PAZ23, -0.02%) declined by $1.20, or 0.1%, and settled at $1,218 per ounce.
• December copper (HGZ23, -0.59%) shed 2 cents, or 0.4%, and reached $3.79 per pound.

Market Drivers

Gold and silver prices have been on a downward trend since the beginning of September due to the continuous rise of the U.S. dollar, which has negatively impacted commodity prices. Additionally, increasing bond yields and the possibility of another interest-rate hike from the Federal Reserve in November have contributed to the challenges faced by precious metals prices.

Once again, the strength of the U.S. dollar on Tuesday coincided with a decrease in gold prices as the currency rebounded from a slight pullback on Monday.

According to FactSet data, since reaching its lowest end-of-day level of the year on July 13, the ICE U.S. Dollar Index DXY has risen by 5.1%. The dollar index, which gauges the strength of the dollar against a basket of major currencies with a significant focus on the euro, was up 0.3% and standing at 104.91 in recent trade.

Precious-metals markets are expected to be significantly impacted by Wednesday’s U.S. Consumer Price Index (CPI) report. Analysts predict that it will reveal a 0.6% increase in consumer prices for the month of August. The data is scheduled to be released at 8:30 a.m. Eastern Time.

“Expect active trading across various markets following the release of the CPI report, particularly if it falls short of market expectations,” commented Jim Wyckoff, senior analyst at Kitco, in an emailed statement.