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Metals Stocks: Silver futures climb by nearly 6%; gold prices settle at their highest in 2 weeks

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Silver futures rallied on Monday, tacking on nearly 6%, while gold futures settled at their highest in two weeks, as the U.S. dollar hit a two-week low and Treasury yields pull back, helping to bolster demand for precious metals ahead of Tuesday’s critical inflation update.

Price action

Gold futures
GCZ22,
+0.62%

for December delivery climbed $12, or 0.7%, to settle at $1,740.60 per ounce on Comex, with the most actively traded contract settling at the highest price since Aug. 29, FactSet data show.

December silver
SIZ22,
+5.61%

climbed $1.09, or 5.8%, to settle at $19.86 per ounce. Prices marked their highest finish since Aug. 17, ending higher for a sixth consecutive session.

Palladium futures
PAZ22,
+4.08%

for December delivery climbed $97, or nearly 4.5%, to $2,274.60 while platinum
PLV22,
+2.68%

for October delivery climbed $27.30, or 3.1%, to $904.20 per ounce.

December copper
HGZ22,
+1.28%

climbed 4 cents, or 1.2%, to $3.6105 per pound.

What analysts say

Analysts attributed the moves higher for gold and silver to the weakness in the dollar, as well as lower Treasury yields.

Gold and silver prices are posting good advances “boosted by another sharp decline in the U.S. dollar index, which hit a two-week low overnight,” wrote Jim Wyckoff, senior analyst at Kitco.com.

The ICE U.S. Dollar Index
DXY,
-0.74%
,
a gauge of the dollar’s strength against a basket of rivals, was off 0.8% to 108.15, trading around its lowest levels in two weeks.

Gold has been “able to defend that $1,700 support level on a number of occasions in recent days, suggesting that dip-buyers are trying to take advantage of downbeat prices,” Fawad Razaqzada, market analyst at City Index and FOREX.com, told MarketWatch. Gold futures last touched intraday lows under $1,700 on Sept. 1, FactSet data show.

Whether gold and silver “can kick on from here or go in reverse depends almost entirely on the direction of U.S. dollar,” he said. The dollar “will face a big test on Tuesday” with the release of U.S. inflation data for August, “which is surely going to be the main focal point for the week.”

“Gold investors are hopeful that inflation has peaked,” he said. If there’s a “weaker-than-expected print on CPI, then this would further support the ‘peak inflation’ narrative and consequently, I would expect the metal to rise a bit more meaningfully on the back of that,” said Razaqzada.

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