Gold and silver fell
After starting the day on a weaker note, gold and silver fell lower as the day progressed. At 2:05 PM EST on October 4, the COMEX gold futures contract for December delivery was trading at $1,275.75 per ounce—a fall of ~2.9%. The COMEX silver futures contract for December delivery was trading at $17.91 per ounce—a fall of ~5.1%.
Gold broke the support level of $1,300 per ounce
On October 4, gold broke below the support level of $1,300 per ounce for the first time since June 24. Richmond Fed President Jeffery Lacker’s comments on October 4 weighed on gold prices and resulted in a fall to three-month low price levels. According to Lacker, an increase in interest rates would help maintain stable inflation. As of October 4, the chances of an interest rate hike in November and December stand at 13.4% and 63%.
Stronger dollar weighs on gold prices
Lacker’s comments also supported the US dollar on October 4. The stronger dollar weighs on dollar-denominated commodities like copper, crude oil, and gold. Gold has been weaker due to the stronger dollar. The dollar gained strength due to better-than-expected US economic data including US consumer sentiment data and ISM manufacturing data. According to the data released on October 3, the ISM manufacturing data rose to 51.5 in September from 49.4 in August.
On October 4, precious metal producers Barrick Gold (ABX), Newmont Mining (NEM), Silver Wheaton (SLW), and Royal Gold (RGLD) fell 11.1%, 10.1%, 10.4%, and 9.1%, respectively. The SPDR Gold Trust ETF (GLD) fell 3.5%.
In the next part, we’ll discuss how precious metal companies performed on October 4.