Gold halts 4-session price slide as U.S. investors turn to Thanksgiving

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Despite a rise in the US dollar and a batch of mostly upbeat US economic reports, gold prices ended slightly higher on Wednesday, tracking four sessions of declines.

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December Gold GCZ22,

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GC00,
+0.01%
Tuesday closed down 50 cents, or 0.1%, at $1,784.30 an ounce, after losing $22.50, or 1.2%. This injury-hit session ended the lowest for the most active contract since November 3, data from FactSet showed, and followed a 2.4% drop on Monday, the sharpest percentage drop since August 6.

US markets will be closed on Thursday for the Thanksgiving holiday.

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Earlier this week, gold fell through a psychologically important level of $1,800 as Treasury yields climbed in a holiday-shortened week. Treasury TMUBMUSD10Y,
1.654%

TMUBMusd30y,
1.976%

TMUBMUSD02Y,
0.644%
Wednesday saw some reduction in yield, at least in the longer term.

However, the rise in the dollar was creating a headwind for dollar-denominated assets, the strategists said. ICE Dollar Index DXY,
+0.41%
was up 0.4% and headed for a weekly gain of 0.9%, taking the index to its highest level since the summer of 2020.

A stronger dollar can make the price of a currency, such as gold, more expensive for foreign investors.

Economic data shows US durable-goods orders declined in October, weekly jobless claims hit their lowest level since 1969, international trade in goods declined 14.6% in October and third-quarter GDP Slightly revised yearly growth of 2.1%.

Other data also highlighted historically high levels of inflation, with the cost of goods and services jumping 0.6% in October based on the Personal Consumption Expenditure Index, or PCE, and from 4.4% in September over the previous year. increased by 5%. This is the highest level since December 1990. The PCE Index is the Federal Reserve’s preferred inflation indicator.

Investors are factoring in a more rigorous outlook for 2022 by newly named Federal Reserve Chairman Jerome Powell, and the latest batch of data is showing continued economic strength.

“The bulls have weakened this week and need to act very quickly and show strength to avoid serious near-term technical losses,” Jim Wyckoff, senior analyst at Kitco.com, said in a note to clients.

Oanda senior market analyst Jeffrey Haley said in a note to clients, and investors are unlikely to re-enter gold in long positions around the holiday.

“The momentum will be muted and means the $1835.00 to $1850.00 zone will limit gains this week, although I would be surprised if we even get to $1810.00 an ounce. If US yields remain strong this week, then Gold will be vulnerable to further losses,” Hailey said.

Elsewhere, December Silver SI00,
+0.19%
It was up 6.1 cents, or 0.3%, at $23.496 an ounce, while industrial metal December copper HG00,
+1.02%

HGZ21,
+1.02%
That added 3.55 cents, or 0.8%, to settle at $4.459 per pound.

Jan Platinum PLF22,
+1.28%,
Meanwhile, December delivery of palladium and palladium closed at PAZ21, up $ 11.10, or 1.2%, at $ 975.30 an ounce,
-0.04%
It declined $2.40, or 0.1%, to end Wednesday’s session at $1,847.90 an ounce.

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