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Gold Futures Settle Sharply Lower As Dollar, Bond Yields Surge Ahead Of Fed Meeting

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Gold prices tumbled on Monday, posting the biggest single-session decline since early March, as rising Treasury yields and U.S. dollar weighed on the safe-haven metal.

With the Federal Reserve most likely to hike interest rates by 50 basis points after its meeting this week, and more such hikes looming large, the dollar climbed higher, and bond yields surged up as well.

The Fed is also likely to announce the launch of balance sheet reduction on Wednesday to contain rising inflationary pressures.

The dollar index climbed to 103.71, gaining more than 0.7%.

The yield on U.S. 10-year Treasury Note briefly moved to 3% today.

Gold futures for June ended down by $48.10 or about 2.51% at $1,863.60 an ounce. The 2.5% drop was the sharpest for the contract, since the 2.7% tumble Gold saw on March 9, 2022.

Silver futures for July ended lower by $0.501 at $22.584 an ounce, while Copper futures for July settled at $4.2680 per pound, down $0.1405 from the previous close.

Concerns about slowing economic growth in China and the ongoing war in Ukraine also weighed on gold prices.

Data released by China on Saturday showed factory activity in the country contracted for a second month to its lowest since February 2020 because of Covid lockdown.

Caixin’s manufacturing purchasing managers’ index saw a second straight month of deterioration.

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