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Metals market today: Gold drops to $1,616 on soaring dollar, silver at $18

By Indrabati Lahiri

10:42, 28 September 2022

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In this article:
AALl
Anglo American
34.220 USD
1.245 +3.780%
ANTO
Antofagasta
14.235 USD
0.575 +4.240%
Copper
Copper
3.7875 USD
0.142 +3.900%
GLEN
Glencore
5.6660 USD
0.144 +2.620%
Gold
Gold
1768.86 USD
18 +1.030%

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Bank reserve gold bars arranged in rows
Gold dropped to about $1,616 per troy ounce subdued by a continuously rising US dollar – Photo: Getty

Precious metals were downbeat on Wednesday morning, with gold, silver, platinum and palladium all pulled down by a soaring US dollar (DXY), which scaled to fresh 20-year highs.

It's not only the British pound that is plunging against the dollar (GBP/USD), but broad-based weakness against the US currency damps demand for precious metals by making them more expensive for buyers using non-dollar currencies.

Continuously rising interest rates, especially by the US Federal Reserve as well as other major central banks such as the European Central Bank and the Bank of England have also contributed to falling metal demand, The US Fed has also gone on record to emphasize that it would do everything required to bring inflation under control, even at the risk of a recession for the US economy.

Gold inched down 0.7% to $1,616 per troy ounce, as investors were more attracted to interest-bearing assets.

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Gold fell to about $1,616 per troy ounce

Metals price performance

Silver dropped 2% to $18 per troy ounce, tracking gold’s footsteps, as the precious metal was also lacklustre due to a stronger US dollar (DXY) and less demand.

Platinum dropped 1.1% to $838 per troy ounce, as demand from the Chinese automotive sector remained weak, and now being further pressured by a rising dollar (DXY). Palladium also fell 1.4% to $2,056 per troy ounce.

Copper dipped 1.3% to $3.2 per pound, falling further away from the critical $3.5 per pound level as China still reels under the impact of repeated COVID-19 restrictions. Iron ore fell from CNY 716 per tonne in the previous trading session to CNY 705 per tonne this session. Aluminium fell 1.2% to $2,089 per tonne.

The US dollar (DXY) inched up from 114.4 in the previous trading session to 114.5 in the current session.

The US 10-year Treasury yields rose from 3.9% in the last trading session to 4.0% on Wednesday morning.

Gold

1,768.86 Price
+1.030% 1D Chg, %
Long position overnight fee -0.0060%
Short position overnight fee 0.0024%
Overnight fee time 22:00 (UTC)
Spread 0.18

Silver

22.17 Price
+4.150% 1D Chg, %
Long position overnight fee -0.0060%
Short position overnight fee 0.0022%
Overnight fee time 22:00 (UTC)
Spread 0.020

Oil - Crude

80.74 Price
+2.280% 1D Chg, %
Long position overnight fee -0.0095%
Short position overnight fee -0.0042%
Overnight fee time 22:00 (UTC)
Spread 0.03

Natural Gas

6.98 Price
-4.170% 1D Chg, %
Long position overnight fee 0.0486%
Short position overnight fee -0.0751%
Overnight fee time 22:00 (UTC)
Spread 0.005

Top mining ETFs and mining stocks

The GDXJ fell over 13% in the past week

The Van Eck Gold Miners ETF (GDX) inched up 0.6% to $22.0, with a weekly decline of about 10.5%.

The Van Eck Junior Gold Miners ETF (GDXJ) rose 0.4% to $26.2 in the previous session, with a weekly decline of about 13%.

The S&P Global Metals and Mining ETF (XME) inched up 2.8% to $42.1 with a weekly decline of about 9.4%.

Glencore (GLEN) edged up 0.9% to GBP 4.7, with a weekly fall of about 3.7%.

Rio Tinto (RIOgb) fell 0.3% to AUD 90.4, with a weekly drop of about 3.4%.

Anglo American (AALI) dipped 0.3% to GBP 26.3, with a weekly decline of about 7.6%.

Antofagasta (ANTO) dropped 0.5% to GBP 10.6, with a weekly fall of about 5.7%.

Today’s market moving events

  • Investors are looking forward to US Federal Reserve Chairman Jerome Powell’s speech due for later in the day, to shed more light on the potential size of interest rate hikes in the coming months and a clearer macroeconomic outlook.

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The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
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