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Gold and silver prices slipped on Wednesday as U.S. Treasury yields edged higher, with the yield on the 10-year note nearing 4%.
Price action
Gold for December
GCZ22,
-0.52%
delivery shed $9.30, or 0.6%, to $1,676.30 per ounce on Comex.
Silver for December
SIZ22,
-1.68%
delivery declined 31 cents, or 1.6%, to $19.19 per ounce.
December palladium futures
PAZ22,
-0.25%
for December delivery climbed $4.10, or 0.2%, to $2,154 per ounce, while platinum futures
PLF23,
-1.15%
for January delivery fell $7.10, or 0.8%, to $892 per ounce.
Copper for December delivery
HGZ22,
-0.84%
fell 3 cents, or 0.8%, to $3.44 per pound.
What’s happening
Ole Hansen, chief commodity strategist at Saxobank, said in a note Wednesday that fluctuations in Treasury yields and the value of the dollar have taken gold and other commodities on a “rollercoaster ride” in recent weeks.
“Commodity markets continue to attract a great deal of directional inspiration from the price action across financial markets,” he said.
The yield on the 10-year Treasury note
TMUBMUSD10Y,
3.960%
rose 2.2 basis points to 3.958% on Wednesday. The ICE U.S. Dollar Index
DXY,
+0.06%,
a gauge of the dollar’s strength against a basket of rival currencies, was flat at 113.23.
However, there’s still reason to be long gold, Hansen said, citing the risk of a Federal Reserve policy “mistake” that could provoke a reversal in stocks, bonds and the dollar.
“Looking ahead we see no reason to change our long-term bullish view on gold with support potentially coming from the risk of a policy mistake sending US economic growth, the dollar and bond yields lower,” he said.
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