By 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
SIH23,
+4.10%
rose 61.4 cents, or 2.8%, to $22.395 an ounce.
January platinum
PLF23,
+2.06%
was up 0.4% at $1,043.90 an ounce, while March palladium
PAH23,
+2.41%
rose 1.7% to $1,897.50 an ounce.
March copper
HGH23,
+1.30%
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
DXY,
-0.99%,
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.
