Gold futures finished lower on Monday, with strength in the U.S. stock market led by gains in technology stocks partly to blame for the metal’s fall from last week’s highest settlement since late February.
A collapse in the Turkish lira also contributed to losses for gold, with the weaker currency likely to dull the yellow metal’s demand from Turkey, which is a major buyer, analysts said. A report from the World Gold Council in January showed that Turkey was the biggest annual gold buyer in 2020, adding 134.5 metric tons to its official gold reserves.
Against the backdrop, gold for April delivery GCJ21,
Bullion’s move lower to start the week comes even as U.S. Treasury yields and the dollar are staging a modest pullback that would ordinarily offer a runway for gold prices.
The 10-year Treasury note TMUBMUSD10Y,
Commodity experts speculated that gold prices were facing selling pressure, nonetheless, because investors were favoring equities as the rise in bond yields appeared to stabilize somewhat. The technology-heavy Nasdaq Composite Index COMP,
Broader commodity markets rallied “after taking fright at the rise in borrowing costs spurred by their own bull market,” Adrian Ash, director of research at BullionVault, told MarketWatch. That can contribute to losses for haven gold.
Meanwhile, May silver SIK21,
Silver, as well as platinum, took their cue from gold Wednesday, “slipping with the yellow metal amid the central-bank turmoil” in Turkey, a key gold buyer, said Ash.
Turkey’s currency and stocks collapsed after the abrupt termination of its central bank head.
Among the Comex metals, April platinum PLJ21 fell 1.3% to $1,184 an ounce. June palladium PAM21 shed 1.2% to $2,600.20 an ounce, but May copper HGK21 edged up by 0.6% to $4.14 a pound.
In related news Monday, Federal Reserve Chairman Jerome Powell said during a webinar sponsored by the Bank for International Settlements that bitcoin is essentially more of a substitute for gold than the dollar. With bitcoin expected to continue its surge, that could bode ill for gold.
