Gold climbs early Wednesday as U.S. dollar’s climb to 16-month high cools somewhat – MarketWatch

Gold futures were headed higher Wednesday morning, as a measure of the U.S. dollar retreated slightly from its highest level since around July of 2020.

Bullion was rising after the precious commodity had been slipping somewhat Tuesday as strong U.S. economic data delivered a boost to the U.S. dollar and quelled demand somewhat for safe-havens.

December gold GCZ21, +0.56% GC00, +0.56% was trading $11.70, or 0.6%, higher at $1,865.80 an ounce, following a 0.7% decline in the previous session.

Data on Tuesday showed that U.S. retail sales jumped by 1.7% in October, marking the biggest gain since March.

However, concerns about inflation, which also featured in the retail sales figures, are buttressing values for gold, which is seen as a hedge against inflation.

Investors will look to a parade of speakers from the Federal Reserve on Wednesday for further guidance about the health of the U.S. economy and the pace of the current reduction of monthly purchases of Treasurys and mortgage-backed securities and the timing and pace of interest rate increases, which could also factor into prices for global assets like gold.

“Today, the focus is going to be on the Fed speeches as a number of members will be speaking today,” wrote Naeem Aslam, chief market analyst at AvaTrade, in a Wednesday note.

Speakers from the U.S. central bank on Wednesday include New York Fed President John Williams, who will deliver a keynote at the 2021 U.S. Treasury Market conference at 9:10 a.m. Eastern, San Francisco Fed President Mary Daly will participate in a fireside chat with Rostin Behnam, acting chair of the Commodity Futures Trading Commission Treasury at 12:40 p.m. Other speakers later in the session, include Atlanta Fed President Raphael Bostic and Chicago Fed President Charles Evans are set to speak after Comex traded assets settle at 2 p.m.

“What we want to hear from them is a coherent message in terms of the monetary policy. So far, the Fed Chairman has said that there is no rush to increase the interest rate and market players aren’t expecting any interest rate until Q3 of next year,” wrote Aslam.

Meanwhile, silver for December delivery SIZ21, +0.89% on Comex rose 24 cents, or 1%, at $25.18 an ounce, aiming to more than make up for a 0.6% decline on Tuesday.

Wednesday’s trading come as the ICE U.S. Dollar Index DXY, -0.06%, a gauge of the currency against a half-dozen others, was trading down by about 0.1%, coming off trading at its loftiest level since around July 2020. A weaker dollar can make assets priced in the currency more appealing to overseas buyers using alternate monetary units.