Gold is on pace for its worst daily decline since March 9, not the worst daily decline of 2022. This article has been corrected.
Gold futures fell sharply Monday, heading for the worst daily decline in about two months, while building on an April retreat that left the precious metal with its worst monthly performance since September.
Gold for June delivery GC00,
“Gold was turned back from $1,920 before the weekend and appears poised to test last week’s low near $1,872,” said Marc Chandler, chief market strategist at Bannockburn Global Forex, in a note.
The ICE U.S. Dollar Index DXY,
Treasury yields, meanwhile, continued to rise, which raises the opportunity cost of holding assets that don’t offer a yield. The 10-year Treasury rate TMUBMUSD10Y,
“The precious metals are getting hit early this week by the bearish outside market forces of a strong U.S. dollar index that is near a 20-year high, solidly lower U.S. crude oil prices and higher U.S. Treasury yields,” Jim Wyckoff, senior analyst at Kitco.com wrote, in a Monday note.
Both the dollar and bond yields have been lifted by expectations the Federal Reserve will move aggressively in an attempt to rein in inflation running its hottest in more than four decades.
Fed policy makers will conclude a two-day meeting on Wednesday afternoon. Investors widely expect the central bank to raise the fed funds rate by 50 basis points, or half a percentage point, rather than deliver the typical quarter-point move. Investors have also been judging whether further outsize rate moves are likely in coming policy meetings.
In other metals trade, July copper HGN22,