Gold prices post lowest settlement in 3 weeks


Gold futures posted their lowest settlement in three weeks on Monday, pressured by strength in the U.S. dollar and Treasury yields.

The U.S. dollar edged up by 0.2% to 92.91, as measured by the ICE U.S. Dollar Index DXY, +0.23%. A stronger dollar can weigh on dollar-priced assets, making them more expensive for overseas buyers. The 10-year Treasury note TMUBMUSD10Y, 1.751% was yielding 1.688%, up from 1.658% at the end of last Friday. Bond prices rise as yields fall.

The stronger dollar and rising bond yields were “negative elements for the metals markets,” said Jim Wyckoff, senior analyst at Kitco.com, in an afternoon market update. Gold and silver also saw “technically-related selling pressure from the shorter-term futures traders amid still-bearish near-term charts.”

Gold for April delivery GC00, -1.51% GCJ21, -1.50% lost$20.10, or 1.2%, to settle at $1,712.20 an ounce, following a 0.5% weekly slump. Prices based on the most-active contract saw their lowest finish since March 8, FactSet data show.

May silver SIK21 SI00 shed 34 cents, or 1.4%, to end at $24.77 an ounce, after posting a 4.6% decline for the week on Friday. May copper HGK21, -0.87% shed 0.8% to end at nearly $4.04 a pound.

Metals futures face a holiday-shortened week. Commodity and other financial markets will be closed on Good Friday this week.

Broad declines in the U.S. stock market had prompted some investors to sell the precious metal to generate cash to cover margin calls, some analysts said, though benchmark U.S. stock indexes saw mixed trading as gold futures settled for the session.

Bullion’s decline on Monday came amid news that a large investment fund, Archegos Capital Management, had dumped $30 billion in holdings, including big positions in ViacomCBS VIAC, -6.68% and Discovery DISCA, -1.60%, making some investors concerned about contagion.

“The Archegos margin call default is threatening to cause major losses at some investment banks and…put contagious pressure onto the equity markets over the weekend,” with the result that gold has come off, said Rhona O’Connell, head of market analysis, EMEA and Asia regions at StoneX.

“This is perfectly normal,” she said in Monday’s newsletter. “ Almost invariably when the equities markets come under pressure gold will come down also.”

“When other markets are suffering and there is the possibility of margin calls or a loss of liquidity or a simple financial loss, gold is one of the first assets to be sold in order to raise cash and minimise the damage,” she said.   

Meanwhile, palladium led the losses on Comex Monday, with the June contract PAM21, -0.15% down 5.4% at $2,530.70 an ounce.

Nornickel on Monday said it completed phase two repairs at two major mines in Siberia. It expects the Oktyabrsky mine to fully resume production in the first 10 days of May and the Taimyrsky mine to resume output in early June.

“This could be negative for palladium over a very concise term as the last estimate was about 12 weeks for repairs to be complete,” said Stephen Innes, chief global markets strategist at Axi, in a market update.

Rounding out action on Comex, the most-active July platinum contract PLN21, -0.92% settled at $1,184.10 an ounce, up 0.2%.