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Metals Stocks: Gold prices post their highest finish in almost 4 weeks

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Gold futures on Monday scored a second consecutive session gain to finish at their highest price in nearly four weeks.

Copper futures, meanwhile, retreated following sharp gains late last week that were driven by a pullback in the U.S. dollar and hopes for a rebound in Chinese demand.

Price action

Gold futures for December delivery
GCZ22,
+0.21%

GC00,
+0.21%

rose $3.90, or 0.2%, to settle at $1,680.50 per ounce on Comex, with the yellow metal settling at its highest price for a most-active contract since Oct. 11, FactSet data show.

December silver
SIZ22,
+0.58%

delivery tacked on 14 cents, or nearly 0.7%, to settle at $20.919 an ounce, marking another finish at its highest since Oct. 4.

December palladium
PAZ22,
+3.04%

advanced $58, or nearly 3.2%, to $1,897.50 per ounce, while January platinum
PLF23,
+3.08%

rose $28.90, or 3%, to $989.40 per ounce.

Copper
HGZ22,
-2.25%

for December delivery fell 8 cents, or about 2.3%, to $3.6035 per pound. after climbing by 7.6% on Friday.

What’s happening

A couple of factors were influencing metals prices on Monday, including a slightly softer dollar and reports that hopes for Chinese capitulation on President Xi Jinping’s “COVID-zero” policy were premature, precious-metals analysts said.

The ICE U.S. Dollar Index
DXY,
-0.72%
,
a gauge of the dollar’s strength against a basket of rivals, was off 0.7% at 110.13.

The precious metal has seen prices climb, supported by Friday’s “mixed” U.S. labor markets data that put the U.S. dollar under some selling pressure, said analysts at ICICI Bank.

The U.S. economy gained a surprisingly strong 261,000 jobs in October, but the unemployment rate rose to 3.7% from 3.5%, government data showed.

Analysts at ICICI Bank said they expected gold prices to continue to trade between $1,600 and $1,700 in the near term, before the U.S. consumer price index report due out Thursday.

Meanwhile, as gold holds near its multi-week highs reached late last week, some analysts are wondering if a near-term bottom may have already arrived.

Gold prices moved a bit higher Monday, “but importantly are holding Friday’s strong gains that included a technically bullish weekly high close that is one chart clue that a market bottom is in place,” said Jim Wyckoff, senior analyst at Kitco.com.

The Federal Reserve last week approved the fourth straight jumbo increase in a key U.S. interest rate and signaled that rates are likely to move higher than previously forecast.

Still, “when the market shifts its focus from the rates/inflation shock to the recession/financial stability fears, we expect this will likely be more favorable for gold bullion,” Paul Wong, market strategist at Sprott, wrote in a recent note.

“The story of the markets through most of the year has been the rate and inflation shocks,” he said. “Only recently has the market begun to price in the medium- and long-term consequences (recession and related financial instability) of the extraordinary rate hikes by the central banks.”

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