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The most active gold futures fell below $2,300 an ounce on Wednesday, hitting their lowest close in more than seven weeks, weighed down by a stronger dollar and rising bond yields, while traders awaited U.S. inflation data due later this week.
USD/USD rose 0.4% It hit a near two-month high against rivals, making gold more expensive for holders of other currencies, while the U.S. 10-year Treasury yield rose 8 basis points to 4.32%, closing near a two-week high.
The key data point this week will be the U.S. personal consumption expenditures price index, the Fed’s preferred inflation gauge, which is likely to factor into the central bank’s monetary policy path amid recent signs of economic recovery.
“After a very busy and impressive spring rally, gold appears to have settled into its typical summer trading range,” Gold Newsletter Editor Brian Lundin tells market observationadding that this range is likely to continue over the next 1-2 months until the Fed cuts interest rates in early fall.
On the expiration date, the front-month June Comex gold contract (XAUUSD:CUR) closed -0.7% to $2,299.20 an ounce, while the most active August contract closed -0.8% to $2,313.20 per ounce, which was the lowest settlement price for the most active contract since May 3.
Front-month Comex silver (XAGUSD:CUR) for June delivery has been settled +0.2% to $28.909 an ounce, while the most active September Comex silver (XAGUSD:CUR) closed +0.2% to $29.26 per ounce.
ETFs: (GLD), (GDX), (GDXJ), (IAU), (NUGT), (PHYS), (GLDM), (AAAU), (SGOL), (BAR), (OUNZ), (NYSE: SLV), (PSLV), (SIVR), (SIL), (SILJ)
Silver’s 21% gain this year has outpaced gold and silver, not to mention the S&P 500, but many investors appear to be shying away from the metal as most silver bullion and silver mining ETFs have net gains year-to-date, according to Morningstar data outflows, while U.S. mint silver coin sales through June were less than half of 2023 sales of 3.4 million ounces.
The Silver Association said industrial demand for the metal will hit a record high in 2023, driven by a 64% rise in demand from the solar panel industry, and the organization expects usage to grow another 20% this year.
The options for owning silver are much more limited than owning gold; aside from physical bars and coins, there are only a handful of ETFs to choose from – the largest silver-backed ETF is the $13.2B iShares Silver Trust (SLV).
Additionally, there are no pure-play silver mining stocks because most silver is mined as a base metal or as a by-product of gold production.
