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Metals Stocks: Gold rises for third day as dollar, Treasury yields pull back

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Gold prices moved sharply higher on Thursday, rising for the third-consecutive session, as the U.S. dollar and 10-year Treasury yields pulled back.

Price action

Gold prices
GCZ22,
+0.33%

GC00,
+0.33%

for December delivery were up $7.40, or 0.4%, to $1,768.90 per ounce on Comex, following two consecutive sessions of gains.

Silver prices
SIU22,
+0.62%

SI00,
+0.62%

for September delivery were up 14.3 cents, or 0.8%, to $19.05 an ounce.

September palladium
PAU22,
+5.85%

climbed $75.40, or 3.7%, to $2,101 per ounce, while October platinum
PLV22,
+0.28%

climbed $5.30, or 0.6%, to $872.10 per ounce.

September copper prices
HGU22,
+1.30%

advanced 5.4 cents, or 1.5%, to $3.698 per pound.

What analysts are saying

Precious metals traders distrust the notion of a ‘Fed pivot’, that is the notion the Federal Reserve will soon slow the pace of interest rate hikes, analysts from TD Securities wrote in a Thursday research note.

“Facing the most hawkish central bank regime since the 1980s, the entire precious metals complex is now trading in a bear market regime, despite rising risks of recession,” the team wrote.

Investors will hear more from Federal Reserve Chairman Jerome Powell on Friday when he speaks at 10 a.m. Eastern Time during the annual economic symposium in Jackson Hole, Wyoming.

Read: Kansas City Fed’s George kicks off Jackson Hole saying inflation remains broad-based and there is ‘more work to be done’

“If the market responds to Powell in a dovish manner that should send inflation expectations even higher, while the dollar and yields should pull back, which would all result in tailwinds on gold,” said analyst at Sevens Report Research in Thursday’s newsletter. “However, a hawkish and ‘growth-insensitive’ Powell would likely send gold back down towards $1,700, potentially by Friday’s close.”

For now, the modest pullback in the dollar and long-term Treasury yields off their recent highs was helping gold recoup some of its most recent drawdown, analysts said.

The ICE U.S. Dollar Index
DXY,
+0.01%
,
a gauge of the dollar’s strength against a basket of rival currencies, was down 0.4%, while the 10-year Treasury yield
TMUBMUSD10Y,
3.081%

was down a half basis point at 3.1077%.

Hear from Ray Dalio at the Best New Ideas in Money Festival on Sept. 21 and Sept. 22 in New York. The hedge-fund pioneer has strong views on where the economy is headed.

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