Gold futures took a breather early Thursday, retreating modestly from a settlement on Wednesday at the highest level since around June for a most-active contract.
December gold
GCZ21,
GC00,
was off $9.80, or 0.5%, at $1,860.40 an ounce, following a 0.9% gain a day ago, which took the precious metal to the highest finish since June 11, FactSet data show.
The pullback in gold comes even as typical headwinds for bullion, a rising dollar and higher yields for government debt, were receding. A weaker dollar can lift the appeal of owning dollar-priced assets for foreign buyers and lower yields reduce the opportunity costs of buying gold over Treasurys, which are considered risk free.
“In commodities, gold was struggling to break past resistance around $1,870/oz even as yields and the dollar pulled back,” wrote Raffi Boyadjian, lead investment analyst at XM.com, in a daily note.
Worries about surging inflation, caused primarily by supply-chain bottlenecks and a rapid increase in demand in the recovery phase of the COVID-19 pandemic, has helped to bolster bullion values in recent weeks.
But it is unclear how much further the precious metal can climb as lower-bound bond yields compel investors to dial up risk taking, drawing some appetite away from precious metals.
December silver
SIZ21,
meanwhile, was trading 18 cents, or 0.8%, lower at $24.95 an ounce, following a 0.9% gain on Wednesday.
This post was originally published on Market Watch
