Gold FuturesMonday (13th) fell more than 2% and wrote more than three-week low,silverdown 3%,Palladiumfell 7%, mainly because the US consumer price index (CPI) unexpectedly rose at the fastest pace in 40 years in May, shattering investors’ hopes that inflation has peaked, and may prompt the Federal Reserve (Fed) to raise interest rates more aggressively, That led to a jump in the dollar, affecting dollar-denominated precious metals.
- New York for August deliveryGold FuturesPrices settled down $43.70, or 2.3 percent, at $1,831.80 an ounce, the lowest since May 18.
U.S. stocks tumbled on Monday, dollar and U.S. Treasury yields surged and overshadowedgoldsafe haven charm.
Gold was battered by a strong dollar on Monday, as ICE measures the greenback’s strength once morest a basket of currencies US dollar index (DXY) rose 0.6 percent to 105.04 in late New York trade. A rising dollar means that dollar-denominated commodities are more expensive for overseas buyers.
In addition, rising interest rates and yields have made non-yieldinggoldHeadwinds in the short term.High yield means holdgoldopportunity cost rises.
The market still widely expects the Fed to raise interest rates by 2 yards (50 basis points) this week, but the Wall Street Journal (WSJ) reported that sources said the Fed may vote this week to raise rates by 3 yards (75 basis points).
Futures markets are betting that the Fed will raise rates by a total of 175 basis points in June, July and September, with a 75 basis point chance of a hike this week, according to CME’s FedWatch tool.
Ricardo Evangelista, senior analyst at AvticTrades, said that the Fed may continue to raise interest rates following this summer, and some analysts have begun to discuss the possibility of raising interest rates by 3 yards this week instead of only 2 yards. Against this background,goldWill be supported by market risk aversion, butgoldGains in the U.S. dollar will remain subdued by the dollar and U.S. Treasury yields.
Other Metal Commodities Trading
- Delivered in JulySilver FuturesIt closed down 68 cents, or 3.1 percent, at $21.255 an ounce, its lowest since May 113.
- Delivered in JulyCopper futuresIt fell 1.9 percent to settle at $4.221 a pound.
- Delivered in JulyPlatinum FuturesIt fell 4 percent to settle at $972.30 an ounce.
- Delivered in SeptemberPalladium FuturesIt tumbled 6.7 percent to settle at $1,778.40 an ounce.
Michael Hewson, chief market analyst at CMC Markets UK, said a wave of lockdowns in China has made the market worried regarding demand and has led to increased demand for catalytic converters used in automobiles.platinumandPalladiumBoth plummeted.
