Gold prices declined on Monday, settling at their lowest in more than five weeks, as expectations that the Federal Reserve might push interest rates even higher have weighed on the yellow metal while boosting Treasury yields and the U.S. dollar. Price action
Gold for April delivery
GC00,
-0.62%
GCJ23,
-0.62%
fell $11, or 0.6%, to settle at $1,863.50 per ounce on Comex. Prices for the most actively traded contract settled at their lowest since Jan. 5, FactSet data show.
Silver prices for March delivery
SI00,
-0.63%
SIH23,
-0.63%
fell 22 cents, or 1%, to $21.852 per ounce.
Palladium for March
PAH23,
+1.78%
gained $11.60, or 0.8%, to $1,536.50 per ounce, while platinum for April
PLJ23,
+0.87%
settled at $959.40 per ounce, up $7.60, or 0.8%.
Copper prices for March
HGH23,
+1.16%
gained 4 cents, or 1%, to $4.0575 per pound.
Market drivers Gold declined Monday due to lack of news and data, with investors awaiting Tuesday morning’s CPI numbers for direction, along with a PPI reading on Thursday, as the “two inflation data sets…could influence” the Federal Reserve’s decision on interest rates, Jeff Wright, chief investment officer at Wolfpack Capital, told MarketWatch.
For the CPI data, the expectations are for a 6.2% year over year and 0.5% month over month for January, said Wright. “Rumors are swirling the data could easily come in above estimates and a hot data point could lead to both U.S. equities and gold taking a quick and pronounced hit to the downside.” See: CPI in the spotlight: Fed worried about sticky inflation Wright said an in-line number at 6.2% year over year and 0.5% month over month, with core inflation at 0.4% month over month, would still be “elevated data sets, but not enough to alarm the FOMC and a small sign of progress over the longer trend.” Gold prices had climbed for three straight months through the end of January, gaining more than 17%, according to FactSet data. But the rally, which also benefited prices of other precious metals like silver, came to a halt earlier this month as robust January economic data, including the Labor Department’s monthly report on the U.S. jobs market and the ISM survey on services-sector activity, spurred a recalibration of interest-rate expectations. “The concern for gold throughout January was that it was trading on sentiment rather than reality and, while the indicators throughout last month matched up with this forward-looking view, it would only take one or two data points out of line with the prevailing view for the precious metal to suffer a price shock,” said Rupert Rowling, a market analyst at Kinesis Money. That’s “exactly what has happened with a hotter-than-expected U.S. jobs print, forcing a recalibration of how soon the Fed will stop its aggressive stance,” he said in a daily note. Investors are coming around to the notion that the Fed will push rates north of 5% in the coming months, then keep them elevated until at least 2024. Some are betting that rates could move even higher, perhaps to 6% or beyond. Fed policy makers, including Chairman Jerome Powell, have contributed to these expectations by insisting that rates still have further to rise, and that the central bank still has a way to go in its battle against inflation. “ …