Gold tumbled to a 2½ year low on Monday as the 10-year Treasury yield climbed to its highest level since 2010, and the dollar advanced to fresh 20-year highs.
Price action
- Gold futures for December delivery GC00, -0.53% GCZ22, -0.53% fell $2.10. or 0.1%, to $1,653.50 per ounce on Comex after trading as low as $1,633.80. Prices for the most-active contract are on track to mark another settlement at their lowest since April 2020, FactSet data show.
- December silver SIZ22, -0.48% tacked on 8 cents, or 0.4%, to $18.99 an ounce.
- December palladium PAZ22, -1.13% was down $4.50, or 0.2%, to $2,066 per ounce, while platinum for October delivery PLV22, -0.23% rose $2.30, or 0.3%, to $861 per ounce.
- Copper prices for December delivery HGZ22, -0.66% traded at $3.353 per pound, up by a penny, or 0.3%.
What’s happening
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 DXY, +0.64%, a gauge of the dollar’s strength against a basket of rival currencies, rose 0.2% to 113.38 largely thanks to ongoing weakness in the euro, pound and Japanese yen.
The 10-year Treasury yield TMUBMUSD10Y, 3.785% climbed 7.2 basis points to 3.762%.
“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,” Rupert Rowling, market analyst at Kinesis Money, wrote in a daily market update. “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.”