Gold futures on Friday dipped briefly below the key level of $1,800 an ounce — marking a loss for the week, while silver prices fell to their lowest finish since July 2020.
The weakness in precious metals comes after gold fell 2% in value in June.
GCQ22 Gold Futures,
for August delivery fell $5.80, or 0.3%, to settle at $1,801.50 an ounce on the Comex, marking the contract’s lowest active close since February and ending 1.6% lower for the week, according to Dow Jones market data. Prices touched a low of $1,783.40, the lowest since January.
Silver futures SIU22,
for September delivery fell 68 cents, or 3.4%, to $19.667 an ounce for their lowest settlement since July 2020. Prices have lost 6.9% this week.
Platinum Futures PLV22,
for October delivery fell $24, or 2.7%, to $871.30 an ounce, down 3.6% on the week.
Palladium Futures PAU22,
for September delivery rose $22, or nearly 1.2%, to $1,938.10 an ounce, ending the week 4.5% higher.
Copper futures for September delivery HGU22,
fell 11 cents, or 2.9%, to $3.604 a pound, the lowest level since February 2021. Prices lost nearly 3.7% for the week.
What the analysts say
As commodities continue to weaken and recession fears hit markets, several commodity analysts said technical action in the gold market suggests the metal will continue to retreat.
Gold managed to get support from buyers on a dip below the $1,800 level over the past six months, but “this time, buyers may come to the rescue much later,” said Alex Kuptsikevich, senior market analyst at FxPro.
The latest dynamics in financial markets – falling stock prices and yields – “suggest that markets are moving into a recession,” he said in emailed commentary.
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Data on Friday showed the ISM barometer of US factories fell 3.1 points to a two-year low of 53% in June, in another sign the US economy is slowing.
Meanwhile, “central banks are simply accelerating monetary policy tightening, putting pressure on long-term inflation expectations,” Kuptsikevich said. “In such an environment, demand for gold as insurance against inflation promises to ease in the coming weeks.”
On the industrial metals side, a group of Commerzbank analysts said China’s easing of COVID restrictions failed to boost demand for copper, which is trading at a 17-month low as fears of a slowdown in global growth continue to burden manufactured goods.
Silver has fallen even more sharply than gold because it has characteristics of both a precious metal and an industrial metal. The extreme fall in the price of silver sent the gold-to-silver price ratio to its highest level in two years.
“In addition to the fall in the price of gold, silver is further pressured by very weak base metal prices – this is because silver is not only an investment metal but equally an industrial metal,” the Commerzbank team said in a research note. note.
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