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Gold prices retreated on Monday, but held mostly above $2,000 per ounce amid a bout of what some precious-metals analysts have described as “profit taking.” A stronger U.S. dollar also weighed on the yellow metal.
Price action
-
Gold futures for June delivery
GC00,
-1.11% GCM23,
-1.11%
fell by $21, or 1.1%, to $2,005.40 per ounce on Comex after tapping an intraday low of $1,996.50. -
Silver futures for May delivery
SI00,
-0.75% SIK23,
-0.75%
lost 15.8 cents, or 0.6%, to $24.935 per ounce. -
June palladium
PAM23,
-3.86%
dropped $56.90, or 3.9%, to $1,405.50 per ounce, while July platinum
PLN23,
-1.36%
declined by $13.80, or 1.4%, to $1,003 per ounce. -
Copper for May delivery
HGK23,
-0.87%
fell 3.8 cents, or 1%, to $3.9775 per pound.
Market drivers
Gold prices rose last week for the sixth week in a row. But prices declined Monday as global markets were caught in a post-Easter lull, with much of Europe still out.
Monday’s decline for gold and silver is “profit taking and nothing else,” said Chintan Karnani, director of research at Insignia Consultants.
Friday’s jobs report showed that the U.S. added 236,000 new jobs in March, while the consensus forecast called for nonfarm-payrolls expansion of 238,000.
The jobs data increased the chance of a quarter-point interest-rate hike in May by the Federal Reserve, said Karnani, in a market commentary.
Still, analysts like myself are expecting a sharp fall in the CPI and PPI numbers, he said. A reading on the U.S. consumer price index is due out Wednesday, while data on the producer price index come out Thursday.
An interest-rate “pause period will be there from the May Federal Open Market Committee meeting and for the rest of the year, Karnani said, adding that he believes interest rates have “peaked out” globally for now. He noted that a rising energy price is the “only risk to my interest rate view.”
On Monday, gold prices weakened as the U.S. dollar strengthened. The ICE U.S. Dollar Index
DXY,
a measure of the buck’s strength against a basket of rivals, rose 0.7% to 102.80.
Gold and silver prices have risen sharply since the start of the new year, continuing a rally that started in the fall.
Expectations that the Federal Reserve could cut interest rates later this year sent most-active gold futures to their highest settlement in 13 months on Wednesday.
Read: Gold at $2,000: Why it took so long for the precious metal to solidly breach that key level
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