Gold Pares Earlier Losses Amid Robust Safe-Haven Inflows
Last week, gold breached the $2,700 mark for the first time, on its way to fresh record highs. This week, major markets were driven by general uncertainty surrounding the U.S. election and conflict in the Middle East. Rate cut speculation and corporate earnings from major companies also emerged as market catalysts throughout this week.
U.S. equities were fresh off a six-week winning streak when on Monday, they encountered downward pressure from surging Treasury yields. As a result, the Dow Jones Industrial Average dipped by 300 points as investors braced for a week full of corporate earnings data. Meanwhile, gold and silver saw little change and would end Monday’s trading at $2,732 and $34.11, respectively.
Gold jumped by over 1% on Tuesday, as the expectation of further monetary policy easing bolstered precious metals prices. Additionally, safe-haven inflows stemming from the Middle East conflict and election uncertainty supported gold and silver. As a result, gold ended the day at a new all-time high of $2,741 while silver ended Tuesday’s trading near at a twelve-year high of $34.59.
After climbing to a fresh all-time high of $2,750 Wednesday morning, gold tumbled by over 1% as Treasury yields rose to a three-month high, and the dollar index rose by 0.4%, making gold less attractive for foreign currency holders. In a similar move, silver dipped by 3% on Wednesday, to a closing price of $33.54, while gold ended the day at $2,724.
Rising Treasury yields and election uncertainty also rattled investors on Wall Street, as the Dow experienced its worst single-day decline in over two months, on Wednesday. On Thursday, the Dow and S&P 500 managed to snap their three-day losing streaks amid stronger-than-expected quarterly earnings reports from companies like Whirlpool, Tesla, and UPS.
Gold also reversed course on Thursday, as investors embarked on a flight to safety amid continued geopolitical upheaval and election concerns. As a result, the yellow metal pared losses from the previous session, and would end Thursday’s trading just below its all-time high, at $2,731.
Gold edged up again this morning, as a risk-off mood supported bullion. Both gold and silver made up ground previously lost to profit-taking and elevated Treasury yields, as gold ended the week 0.5% higher, at $2,743. Meanwhile, silver ended the week 1% lower at $33.61 an ounce.
Stocks in the U.S. were mixed this morning, as Treasury yields continued their uptick, and uncertainty dented investor sentiment. Ultimately, equities would end the week mixed as the S&P 500 shed 0.85% and the Dow Jones Industrial Average dipped 2.5%. However, the tech-heavy Nasdaq Composite managed to eke out a 0.35% gain, on the back of robust earnings from tech companies.