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Metals Stocks: Gold futures top $1,800 an ounce for the first time since mid-August

Gold futures rose Thursday, finding some breathing room as the U.S. dollar and Treasury yields extended a retreat following remarks a day earlier by Federal Reserve Chairman Jerome Powell indicating policy makers would likely deliver a smaller rate increase this month.

Price action

Gold for February delivery GC00 GCG23 rose $41, or 2.3%< to $1,800.90 an ounce on Comex.

March silver

rose 61.4 cents, or 2.8%, to $22.395 an ounce.

January platinum

was up 0.4% at $1,043.90 an ounce, while March palladium

rose 1.7% to $1,897.50 an ounce.

March copper

rose 0.6% to $3.759 a pound.

Market drivers

Federal Reserve Chairman Jerome Powell indicated Wednesday the central bank may decide to raise interest rates at a slower pace at its next policy meeting. Treasurys rallied, pulling down yields, while the dollar retreated.

Yields continued to pullback early Thursday, while the ICE U.S. Dollar Index
a measure of the currency against a basket of six major rivals, was down 0.5%.

“Gold likes the combination of lower interest rates and a weaker dollar,” said Marc Chandler, chief market strategist at Bannockburn Global Forex, in a note. 

Lower yields lowers the opportunity cost of holding nonyielding assets like gold, while a lower dollar makes commodities priced in the unit less expensive to users of other currencies.

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