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Metals Stocks: Gold futures log a 7th straight session decline, settle at lowest since 2021

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Gold marked a seventh straight session decline on Wednesday, with prices settling at their lowest in more than 21 months as the U.S. dollar marched higher.

Price action

Gold futures
GC00,
-1.65%

GCQ22,
-1.65%

for August delivery lost $27.40, or nearly 1.6%, to settle at $1,736.50 per ounce, the lowest level for a most-active contract since September 2021. Gold’s seven session drop marked the longest consecutive decline since the seven-session fall ended March 5, 2019, according to Dow Jones Market Data.

Silver futures for July delivery
SIN22,
+0.12%

edged up by 4 cents, or 0.2%, at $19.159 an ounce after five days of declines. They settled Tuesday at the lowest since July 2020.

Platinum
PLV22,
-1.13%

for October delivery lost $9.80, or nearly 1.2%, to $840.90 per ounce.

Palladium futures
PAU22,
-1.03%

for September delivery declined $22.50, or 1.2%, to $1,896.30 an ounce.

Copper
HGU22,
+0.47%

for September delivery shed a penny, or 0.2%, to $3.408 per pound.

What analysts are saying

The most obvious factor for gold’s decline is the sharp rise in the dollar, “where the DXY index (a basket of the world’s six most popular currencies) has renewed its highs over the last twenty years,” said Alex Kuptsikevich, senior market analyst at FxPro. “Gold often acts as an ‘anti-dollar with leverage’ for investors, so it was unsurprising to see such a market reaction” on Tuesday.

On Wednesday, the ICE U.S. Dollar index
DXY,
+0.51%

was up 0.5% at 107.03.

Kuptsikevich also said that a continued selloff in industrial metals and the drop in silver, due to the worsening global economic outlook, may have also contributed to the pressure on gold.

“The price of gold is now at its low since late last year,” he said in emailed commentary. “This position simultaneously shows us buyer strength and tremendous potential for a decline.”

In electronic trading Wednesday afternoon, futures prices for the precious metal traded at $1,737 an ounce, showing little change from the settlement/

Minutes from the Federal Reserve’s June meeting, released about a half hour after the gold futures settlement, showed that officials from the central bank viewed moving policy to “restrictive stance” was warranted and that an “even more restrictive stance” might be needed.

Other markets

The euro
EURUSD,
-0.78%

weakened against the dollar, sliding to less than 1.02 euros to the dollar.

U.S. benchmark stock indexes saw mixed trading, with the Dow Jones Industrial Average
DJIA,
+0.49%

down 0.2%,

Market Extra: Why is the stock market so volatile in 2022? These traders may be to blame, says JP Morgan

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