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Metals Stocks

May 25, 2022, 1:42 p.m. EDT

Gold books worst fall in two weeks, snaps 4-day rally as Fed minutes loom

By Joy Wiltermuth and Joseph Adinolfi

Precious metals closed lower on Wednesday, snapping a four-day streak of gains, as investors braced for the release of the minutes from the Federal Reserve’s two-day meeting from earlier this month.

Gold for June delivery (NYM:GC00) retreated roughly 1%, or $19.10, to settle at $1,846.30 an ounce, while silver (NYM:SI00) shed about 1% to close at $21.87 an ounce.

While precious metals like gold historically have been seen as safe haven assets, in recent months, it has tended to trade in the same direction as equity indexes. On Wednesday, gold and silver remained lower, while U.S. stocks edged higher, and despite the fact that Treasury yields, which move inversely to prices, were on the downswing.

Marshall Gittler, head of investment research at BDSwiss, said the dynamic across markets was puzzling: “Gold and silver are trading as ‘risky assets’ nowadays.” Gold and stocks both were under pressures Wednesday, but the precious metals has been taking cues lately from the direction of the dollar, (IFUS:DXY) which was back on the gain, up 0.4%, at last check.

The U.S. dollar is on a “corrective bounce,” said Jim Wyckoff, senior analyst at Kitco.com, in a Wednesday note, adding that trading could be muted until the 2 p.m. release of Fed minutes. “The marketplace is looking for further guidance on the timing and pace of the Fed’s monetary tightening cycle, and on inflation prospects.”

Metals mostly retreated across the complex, but with palladium futures (NYM:PA00) up 0.1% to settle at $1,989.30 an ounce, while platinum futures (NYM:PL00) shed 1.3% to close at $929.30 an ounce.

Even industrial metals like copper (NYM:HG00) were off on the day, with futures ending down 1.1% at $4.25 a pound.

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