Gold futures traded lower on Monday as traders being a week that includes a report on inflation and multiple central-bank meetings where interest-rate hikes could diminish the yellow metals’ appeal to investors.
Price action
- February gold GC00, -0.52% GCG23, -0.52% was down $ 6.50, or 0.4%, at $ 1,804.20 per ounce on Comex, according to FactSet data.
- March silver SI00, -0.39% SIH23, -0.39% shed 11 cents, or 0.5%, to $ 23.61 per ounce.
- Palladium for March PAH23, -2.02% delivery lost $ 37.30, or 1.9%, to $ 1,931 per ounce, while platinum for January PLF23, -1.88% delivery was off $ 13.90, or 1.3%, to $ 1,022 per ounce.
- March copper HGH23, -1.15% fell 5 cents, or 1.3%, to $ 3.830 per pound.
What’s happening
Gold futures have rebounded over the past month as investors reacted to fears that the Federal Reserve might need to hike interest rates more aggressively early next year, raising the likelihood of a sharp economic downturn, market strategists said.
But now, gold prices are softening a bit as investors shy away from precious and industrial metals as they await Tuesday’s consumer-price index report, along with a smattering of central bank meetings — including the Fed, the European Central Bank, the Bank of England, the Swiss National Bank and others — which are all expected this week.
When central banks impose higher interest rates, it makes gold less attractive by comparison since the yellow metal doesn’t offer a yield to investors.
“As is the case with copper, a hawkish surprise from the Fed or hot inflation print Tuesday are significant risks to the gold rally,” analysts with Sevens Report Research said Monday.