Palladium futures climb to a fresh record high
Gold futures notched back-to-back session gains on Wednesday, settling at their highest in over six years as expectations grew for loose global monetary policy, boosting the appeal of the yellow metal.
International Monetary Fund head Christine Lagarde’s nomination to lead the European Central Bank and those of Christopher Waller and Judy Shelton by President Donald Trump have supported a rush to buy government debt, driving European sovereign paper and U.S. Treasury yields sharply lower Wednesday.
“By rejecting Germany’s Jens Weidmann and choosing IMF chief Christine Lagarde to head the ECB, the Eurozone’s political leaders have shown they won’t hear any more hawkish talk from Frankfurt,” Adrian Ash, director of research at BullionVault, told MarketWatch. “That should please gold bulls as much as it relieves Eurozone bond traders.”
Sinking debt yields can raise the allure of commodities such as gold which doesn’t offer a coupon.
The German 10-year government bond yield TMBMKDE-10Y, +4.48% slid to negative 0.386%, pushing deeper into record negative territory. Meanwhile, the Italian 10-year government bond yield TMBMKIT-10Y, +1.36% plummeted 25 basis points to 1.606%. The U.S. Treasury note yielded TMUBMUSD10Y, -1.26% 1.950%, marking its lowest levels since 2016.
Against that backdrop, August gold GCQ19, -0.22% added $12.90, or 0.9%, at $1,420.90 an ounce on Comex, after touching a high of $1,441. Prices for the most-active contract marked their highest settlement since May 14, 2013, according to Dow Jones Market Data.
Meanwhile, palladium resumed its climb to record highs, topping the record settlement seen in March. The most-active September contract PAU19, -0.77% rose 0.8% to a fresh Comex record of $1,565.80 an ounce.
“Weak data from Asia and the U.S. are conspiring with the news out of Brussels to push gold prices higher again,” said Ash.
Economic data Wednesday revealed that the U.S. created a seasonally adjusted 102,000 private-sector jobs in June, while economists polled by Econoday expected 140,000 new jobs.
“This downbeat report helped to push gold back closer to overnight highs,” said Jim Wyckoff, senior analyst at Kitco.com, in an email update. “Traders and investors are looking ahead to Friday morning’s more important June U.S. jobs report from the Labor Department. The key nonfarm payrolls number of the report is expected to show a rise of 165,000, but the weaker ADP number…has many thinking Friday’s non-farms number will also be a downside miss.”
The U.S. trade deficit, meanwhile, jumped 8.4% in May to the highest level of this year, and weekly jobless claims fell slightly by 8,000 to 221,000. An index of service-oriented companies such as banks, restaurants and hospitals slipped to 55.1% last month from 56.9% in May, the Institute for Supply Management said Wednesday.
Other metals traded on Comex settled higher, with September silver SIU19, -0.14% up 0.6% at $15.336 an ounce and September copper HGU19, -0.13% adding 0.7% to $2.683 a pound. October platinum PLV19, -0.47% rose 1.2% to $843.60 an ounce.