Gold for June delivery fell $7.40, or 0.4%, to settle at $1,948.20 an ounce on Comex, leaving it down 1.4% for the week so far
Gold futures posted a third consecutive decline on Thursday, extending their retreat from Monday’s high above $2,000 an ounce.
Gold for June delivery fell $7.40, or 0.4%, to settle at $1,948.20 an ounce on Comex, leaving it down 1.4% for the week so far. May silver lost 65 cents, or 2.6%, at $24.621 an ounce, losing more than 4% so far this week.
Gold was pressured Wednesday as the real, or inflation-adjusted, yield on the 10-year U.S. Treasury note briefly moved above zero for the first time since 2020. Gold had previously been largely brushing off rising yields, which raise the opportunity cost of holding a nonyielding asset.
This week’s chorus of hawkish Federal Reserve comments and a return to positive real rates have reduced the appeal of both gold and silver, analysts at Zaner wrote in Thursday’s newsletter.
On Thursday, Fed Chairman Jerome Powell said it is ‘appropriate in my view to be moving a little more quickly’ on raising interest rates.
Gold and silver also fell as a precipitous decline in the dollar has had little cushioning influence for prices, highlighting a serious lack of buying interest on the sidelines, the Zaner analysts said.
Still, gold has been underpinned by haven-related demand as Russia’s invasion of Ukraine continues.
Gold is likely to remain supported as traders eye the May 9 holiday in Russia, said Stephen Innes of SPI Asset Management, in a note.
Many are expecting a significant surge in the conflict around this time — there’s increasing pressure on Russia to turn the tide in the war around this important holiday. We should expect more sanctions to be announced by allies in the coming days, which should be favourable for gold via the supply chain and inflation channels, he wrote.