Metals Stocks: Gold heads for fifth loss in six sessions


A previous version of this report included an incorrect number of consecutive losses for gold.

Akos Stiller/Bloomberg

Gold futures edged lower Monday, as a rise in Treasury yields helped put the metal on track for a fifth loss in six sessions, even as a popular gauge for the dollar headed lower.

June gold

GCM8, -0.23%

fell $1.30, or 0.1%, to $1,319.40 an ounce after tapping an intraday high of $1,322.40. Gold futures have held below Thursday’s settlement at $1,322.30, which marked a recent peak, the highest finish for a most-active contract since April 27. Gold futures logged a roughly 0.5% rise last week, the first weekly climb in about a month.

A time of geopolitical uncertainty on at least three fronts, including Iran, North Korea and trade with China, has rattled markets, but hasn’t engendered the type of uncertainty sufficient to push bullion higher.

The dollar was up 0.6% so far in May, trimming its drop over the past 12 months to about 7%. A stronger U.S. currency makes dollar-denominated gold most expensive for user of other currencies. A recent ascent in the buck has helped to limit gold’s moves.

On Monday, however, the ICE U.S. Dollar Index

DXY, -0.05%

—which measures the greenback against a half-dozen counterparts—fell to 92.384, from 92.509 late Friday in New York. The buck suffered its first weekly decline through Friday after three consecutive weekly gains as relatively subdued inflation data stirred doubt over market expectations for two additional, rather than three, interest-rate hikes by the Federal Reserve in 2018.

Even an expected quarter-point increase as soon as next month, as Fed watchers are expecting, which would typically be a gold-negative event, may not be enough to shake the metal from the relatively tight $1,300 to $1,350 range it has been confined to this year, analysts have said.

Read: Fed could have to raise interest rates above 3%, Mester says

“Both gold and silver put up a fight against the strong dollar threat in the week to May 8, Commitments of Traders data just out showed, noted Ole Hansen, commodities analyst at Saxo Bank. “Both managed to hold onto key support at $1,300/oz and $16/oz, respectively,” he said in a tweet.

Meanwhile, Treasury yields saw sizable gains on Monday as traders looked for further clues on the Fed’s rate-increase intentions. The 10-year Treasury note yield

TMUBMUSD10Y, +0.62%

added 2.7 basis points 2.993%. Higher Treasury yields can spell weakness for gold which, like other commodities, offers no yield.

In other metals trading, July silver

SIN8, -0.76%

 fell 0.5% to $16.67 an ounce after a gain of about 1.4% for last week.

July copper

HGN8, -0.59%

declined by 0.5% to $3.096 a pound. July platinum

PLN8, -1.20%

shed 1% to $916.20 an ounce, while June palladium

PAM8, +0.84%

 rose 0.7% to $992.50 an ounce.

A quarterly report Monday from World Platinum Investment Council showed expectations for tighter platinum supplies this year, compared with 2017, but the market is still forecast to see an overall supply surplus this year of 180,000 ounces, down from a surplus of 315,000 ounces in 2017.

In exchange-traded funds, the SPDR Gold Shares

GLD, -0.21%

 traded nearly flat, while the iShares Silver Trust

SLV, -0.51%

shed 0.1%. The VanEck Vectors Gold Miners

GDX, -0.46%

fell less than 0.1%.

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