Gold and silver extend losses despite weaker dollar

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Gold and silver continued to weaken on Thursday after the yellow metal settled at its lowest level in 15 months.

price action
  • August Gold Futures GC00,
    +0.06%

    GCQ22,
    +0.06%
    fell $20, or 1.2%, to $1,680 an ounce.

  • SIU22 September Silver Futures,
    -1.03%
    fell 50 cents, or 2.6%, to $18.18 an ounce.

  • PLV22 October Platinum Futures,
    +0.39%
    were down $12, or 1.5%, at $834 an ounce, while September palladium futures PAU22,
    +0.08%
    were down $4.60, or 0.2%, at $1,857 an ounce.

  • September Copper Futures HGU22,
    -0.98%
    fell 5 cents, or 1.6%, to $3.27 a pound.

What analysts say

Analysts blamed the weakness in gold and silver on the general “risk-free” mood on Thursday after what was a strong week for risky assets like equities, as Europe faced both at a historic central bank meeting and at the end of the maintenance period on the Nord Stream 1 Conduite. Some have wondered why gold isn’t bouncing back more given the dollar’s pullback this week.

Jeffrey Halley, senior market analyst at OANDA, said gold’s inability to rally this week despite the weaker dollar has raised new questions about the long-term trend in precious metal prices.

“Having completely failed to rally against material weakness in the US Dollar this week, it fell further to reach longer-term support overnight and this morning,” Halley wrote. “To say gold’s price action is disappointing is an understatement, and it appears to face imminent material downside risks if the technical chart is to be believed.”

However, Kevin Dempter, technical analyst at Renaissance Macro, said the macro backdrop for gold looks favorable and wondered if the precious metal could approach cycle lows.

The ICE US Dollar Index DXY,
-0.57%,
an indicator of dollar strength against a basket of rivals, held steady at 107.14 after pulling back from multi-decade highs.

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