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Metals Stocks: Gold futures climb back above $1,800, on track for highest finish in nearly 6 weeks

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Gold futures climbed above $1,800 an ounce Monday, putting bullion on track to finish at its highest price in more than six weeks.

Bullion bullishness, however, appeared capped by a modest rise in the U.S. dollar and rates for benchmark Treasurys holding at or around multimonth highs.

Still, gold bulls make the case that the dollar has been tracking lower in recent days after hitting a peak earlier this month, paving the way for dollar-pegged assets to advance.

“The U.S. dollar has been retreating from the yearly highs reached earlier in October, as markets adjust to the spreading of inflation-related fears across the globe, which means that the same forces that supported the U.S. dollar earlier in the year are now propelling other currencies to fresh highs, a dynamic that penalizes the dollar and therefore supports gold,” wrote Ricardo Evangelista, senior analyst at ActivTrades in a Monday note.

The dollar, as measured by the ICE U.S. Dollar index
DXY,
+0.21%
,
was up 0.2% in Monday dealings, but traded around 0.4% lower for the month.

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Against that backdrop, December gold
GCZ21,
+0.63%

GC00,
+0.63%

 was trading up $12, or 0.7%, at $1,808.30 an ounce. Prices on Monday for the most active contract were poised to settle at their highest since mid-September.

Gold scored a 1.6% weekly climb on Friday, marking the fourth weekly advance in five weeks, according to Dow Jones Market Data, and the sharpest such rise for a most-active contract since the period ended Aug. 27.

Gold also posted a climb for Friday’s trading session, though ended below the day’s best levels, after remarks from Federal Reserve Chairman Jerome Powell raised the likelihood that the central bank will soon start to slow, or taper, its monthly bond purchases.

“Market-based inflation expectations surging towards 3% were the main driver” of the price gains last week, but “a modest pullback in the dollar also helped offset an uptick in bond yields,” analysts at Sevens Report Research wrote in Monday’s newsletter.

“Bottom line for gold, inflation concerns are supporting the market here and as long as inflation expectations remain elevated, gold will be able to hold off the 2021 lows,” they said.

Meanwhile, December silver
SIZ21,
+0.60%

SI00,
+0.60%

was trading up by 15.1 cents, or 0.6%, at $24.60 an ounce, after logging a 4.7% weekly climb, which was the sharpest weekly climb since May 7.

Among other metals traded on Comex, December copper
HGZ21,
+0.69%

tacked on 0.7% to $4.529 a pound. January platinum
PLF22,
+1.12%

added 0.3% to $1,055.60 an ounce and December palladium
PAZ21,
+0.71%

rose 0.3% to $2,042 an ounce.

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