Gold down, falling for a sixth session early Monday as the dollar strengthens, pressuring the precious metal amid expectations of a series of aggressive interest rates to rein in inflation.
The yellow metal touched its lowest level in more than three weeks Monday as the dollar rose to the highest level in more than a month, making gold more expensive for holders of other currencies. DG spot gold has clawed back to near $1,740, after hitting $1730, as traders buy the dip.
Investors are awaiting this week’s annual meeting of central bankers in Jackson Hole, Wyoming, for further indications on monetary policy. Fed Chairman Jerome Powell is set to speak Friday morning, while European Central Bank Executive Board member is set to speak Saturday. Bank of England Governor Andrew Bailey will also attend.
Front-month gold futures fell 2.9% last week to settle at $1,762.90 an ounce on Comex after the December contract decreased 0.5% Friday. Bullion dropped 1.4% in July after falling 2.2% in June and 3.3% in May, its worst month since September. The metal retreated 3.5% in 2021. Currently, the December contract is down $14.40 (-0.82%) an ounce to $1748.50 and the DG spot price is $1739.90.
Holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, rose 0.32% Friday to 989.01 metric tons, Reuters reported.
Investors are now betting there’s a 54.5% chance of a 50-basis-point rate hike in September, with just 45.5% projecting a 75-basis-point increase, according to the CME FedWatch Tool. A month ago, 59.6% of investors anticipated a hike of 75-basis points or more. The Fed raised rates by 75 basis points each in June and July, though a few positive economic reports since then had triggered some speculation that the Fed might impose a smaller increase in September.
Richmond Fed President Thomas Barkin said Friday that the central bank would go as far as risking an economic recession to curb inflation.
The Fed’s Neel Kashkari is scheduled to speak Tuesday. And economic reports on durable goods, MBA mortgage applications, and pending home sales are due Wednesday. U.S. GDP and weekly initial jobless claims come out Thursday.
Front-month silver futures fell 8% last week to settle at $19.18 an ounce on Comex after the December contract tumbled 2% Friday. Silver slipped 0.8% in July after declining 6.2% in June and falling 6.1% in May. It retreated 12% in 2021. Silver prices are tied to industrial demand. The September contract is currently down $0.254 an ounce to $18.815 and the DG spot price is $18.96.
Spot palladium retreated 4.5% last week to $2,148.50 an ounce after falling 1.5% Friday. Palladium rose 9.9% in July after losing 2.9% in June and 14% in May, the biggest monthly decline since September. It retreated 22% in 2021. The current DG spot price is down $127.90 an ounce to $2021.00.
Spot platinum declined 7% last week to $901.80 an ounce after slipping 1.8% Friday. Platinum retreated 0.3% in July after losing 7.2% in June. It dropped 9.4% last year. The DG spot price is currently down $25.60 an ounce to $880.80.
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