By Myra P. Saefong and Joseph Adinolfi
Gold fell for a second straight session on Monday to settle at its lowest price in almost 2½ years, as the 10-year Treasury yield climbed to its highest level since 2010, and the dollar advanced to fresh 20-year highs.
Gold futures for December delivery /zigman2/quotes/210034565/delayed GC00 +0.16% /zigman2/quotes/210039517/delayed GCZ22 +0.57% fell $22.20. or 1.3%, to settle at $1,633.40 per ounce on Comex after trading as low as $1,628.50. Prices for the most-active contract finished the session at their lowest since April 1, 2020, FactSet data show.
December silver /zigman2/quotes/210319410/delayed SIZ22 +0.82% dropped 43 cents, or 2.3%, to $18.48 an ounce.
December palladium /zigman2/quotes/229904593/delayed PAZ22 -0.72% was down $21.50, or 1%, to settle at $2,049 per ounce, while platinum for October delivery declined by $8.60, or 1%, to $850.10 per ounce.
Copper prices for December delivery /zigman2/quotes/210059544/delayed HGZ22 +0.51% ended at $3.2945 per pound, down by a nickel, or nearly 1.5%.
Gold prices have been reeling in recent weeks thanks to expectations for more aggressive monetary policy tightening from the Federal Reserve and other global central banks.
“Rising government bond yields and a soaring U.S. dollar index are the main bearish elements driving the precious metals markets south,” said Kitco Senior Analyst Jim Wyckoff, in a note to clients.
The ICE U.S. Dollar Index /zigman2/quotes/210598269/delayed DXY +0.11% , a gauge of the dollar’s strength against a basket of rival currencies, rose 0.7% to 114.18 largely thanks to ongoing weakness in the euro, pound and Japanese yen.
The 10-year Treasury yield /zigman2/quotes/211347051/realtime BX:TMUBMUSD10Y +1.53% climbed more than 19 basis points to 3.887%.
“Last week’s series of interest rate hikes by central banks had put gold under heavy near-term pressure and with no prospect of the banks changing course in the coming months, the medium-term outlook also looks gloomy for the precious metal,” Rupert Rowling, market analyst at Kinesis Money, wrote in a daily market update.
“The end of this week will bring a slew of inflation data , which is expected to show that consumer prices are still rising at an ever faster pace with the peak still not reached,” he said. “This will reinforce the hawkish strategies of central banks who have been using rate hikes to try and bring inflation back down to their target figure of around 2%, something that looks like a remote hope currently.”
“Gold investors will be clinging to hopes that inflation will soon peak so these rate hikes that have pushed gold’s price down so far in recent months will finally relent,” said Rowling. “However, they are likely to have to wait for a while yet.”