Gold dips below the $1,800 mark as silver tumbles to its weakest level in 2 years

Price action

• Gold futures
  GCQ22,
  -0.01%

  GC00,
  -0.01%
  for August delivery fell $5.70, or 0.3%, to $1,801.60 an ounce on Comex, trading around 1.6% lower for the week. Prices touched a low of $1,783.40, the lowest intraday level for a most-active contract since January, FactSet data show.

• Silver futures
  SIU22,
  -2.71%

  SI00,
  -2.71%
  for September delivery fell 76.2 cents, or 3.7%, to $19.59 an ounce, eyeing their lowest settlement since July 2020. Prices are set to lose more than 7% this week.

• Platinum futures
  PLV22,
  -2.84%

  PL00,
  -2.84%
  for October delivery fell $36.20, or 4.1%, to $858.90 an ounce.

• Palladium futures
  PAU22,
  +0.93%

  PA00,
  +0.93%
  for September delivery rose $7.40, or 0.4%, to $1,923.50 an ounce.

• Copper futures for September delivery
  HGU22,
  -2.78%

  HG00,
  -2.78%
  fell 13.2 cents, or 3.6%, to $3.578 per pound, on track to settle at the lowest since February 2021.

What analysts are saying

As commodities continue to weaken and recession fears batter markets, several commodity analysts said that the technical action in the gold market suggests that the metal will continue to slide.

Gold has managed to get support from buyers on a dip below the $1,800 level in the last six months but “this time, buyers may come to the rescue much later,” said Alex Kuptsikevich, senior market analyst at FxPro.

The latest financial market dynamics — falling equity prices and yields — “suggest the markets are banking on a recession,” he said in emailed commentary.

Data Friday show that the ISM barometer of American factories fell 3.1 points to a two-year low of 53% in June in another sign the U.S. economy is slowing.

Meanwhile, “central banks are only picking up speed in tightening monetary policy, creating pressure on long-term inflation expectations,” said Kuptsikevich. “In such an environment, demand for gold as insurance against inflation promises to decline in the coming weeks.”

On the industrial metals side, a team of analysts at Commerzbank said the easing of China’s COVID restrictions had failed to bolster demand for copper, which is trading at its weakest level in 17 months, as fears of slowing global growth continue to weigh on industrial commodities.

Silver has fallen even more sharply than gold because it has characteristics of both a precious metal and an industrial metal. The excess decline in the price of silver has sent the ratio of gold to silver prices rise to its highest level in two years.

“Besides the falling gold price, silver is being additionally depressed by the very weak base metals prices — this is because silver is not only an investment metal but to an equal extent also an industrial metal,” said the Commerzbank team in a research note.

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