Gold slipped early Monday as U.S. treasury yields and the dollar rose, boosting on the scheduled peace talks to end the Russia-Ukraine war. The bullion more than 1% early in the trading day, down to $1,927 an ounce. .
The yellow metal then regained a little ground, up near $1,940 an ounce, when the U.S. 5-year and 30-year Treasury yields inverted for the first time since 2006. This can be a sign of an impending recession. The yield on the 5-year Treasury note rose to 2.6361% this morning, while the 30-year yield was down less than 1 basis point to 2.6004%. However, the spread between the 2-year and the 10-year rate has stayed positive. This is the primary yield spread watched by traders.
Strength in the U.S. dollar and in Treasury yields ahead of a series of anticipated Federal Reserve interest rate hikes also pressured the yellow metal. Gold also retreated after posting its third weekly rally in four weeks last week.
Front-month gold futures rose 1.3% last week to settle at $1,959.80 an ounce on Comex, though the June contract slipped 0.4% Friday. Gold is up 3.1% in March after gaining 5.8% last month. It retreated 3.5% in 2021. The April contract is currently down $22.7 (-1.16%) an ounce to $1931.50 and the DG spot price is $1,937.90.
Russia’s central bank said Friday that it will restart buying gold from banks at a fixed price of 5,000 Russian rubles ($52) a gram, Reuters reported. The move came a day after British Prime Minister Boris Johnson said that the U.K. and its allies would try to increase the economic pressure on Russia by determining whether more can be done to prevent Russian President Vladimir Putin from accessing his gold reserves — and that such economic pressure could hasten the end of the war.
Though gold dipped in anticipation of the new round of peace talks — to be held Monday in Turkey — the war itself kept a floor under prices. U.S. President Joe Biden said over the weekend in a speech in Warsaw that Putin “cannot remain in power.”
Continued uncertainty over the course of the pandemic also helped support the yellow metal. China began a two-stage lockdown of Shanghai, its financial hub, to contain a surge in COVID-19 cases.
In upcoming economic news, investors were awaiting key inflation data on Thursday and the closely watched U.S. jobs report for March on Friday. Manufacturing indexes from the U.S. and other major economies are also due out on Friday. A number of Fed officials are also set to speak this week, including the Atlanta Fed’s Raphael Bostic on Tuesday, the Richmond Fed’s Tom Barkin and Kansas City Fed’s Esther George on Wednesday, and the Chicago Fed’s Charles Evans on Friday.
Front-month silver futures increased 2.1% last week to settle at $25.62 an ounce on Comex, though the May futures dropped 1.2% Friday. Silver is up 5.1% in March after surging 8.8% in February. It fell 12% in 2021. Silver prices are tied to industrial demand. The May contract is down $0.435 (-1.70%) an ounce to $25.180 and the DG spot price is $25.01.
Spot palladium retreated 4.6% last week to $2,404.50 an ounce after falling 5.8% Friday. It touched a record $3,440.76 earlier this month. Russia produces about 40% of the world’s palladium, and Russia’s Nornickel is the world’s largest supplier of palladium. The metal is down 2% in March after gaining 5.3% in February. It retreated 22% in 2021. Currently, the DG spot price is down $20.90 an ounce to $992.00.
Spot platinum decreased 3% last week to $1,008.40 and lost 2.4% Friday. The metal is down 3.6% in March after advancing 1.7% in February. It lost 9.4% last year. The DG spot price is currently down $155.60 an ounce to $2,263.50.
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