Gold slides over 2%, palladium sheds 7% as dollar stands tall
Published by
ScrapPrices
Published on June 13,2022 09:00 AM Metals
Gold and palladium suffered sharp declines on Monday, as the dollar rallied on bets for steep interest rate hikes by the U.S. Federal Reserve, eroding appeal for bullion and other precious metals.
Gold slides over 2%, palladium sheds 7% as dollar stands tall

June 13 (Reuters) - Gold and palladium suffered sharp declines on Monday, as the dollar rallied on bets for steep interest rate hikes by the U.S. Federal Reserve, eroding appeal for bullion and other precious metals.

Spot gold fell 2.2% to $1,829.52 per ounce by 12:05 p.m. EDT (1605 GMT). Gold futures shed 2.4% to $1,829.80.

The dollar index hit a multi-decade peak, becoming the preferred safe-haven at the expense of gold, since rising interest rates reduce appeal for bullion, which pays no interest.

"There's no safety trade anywhere, so gold will be liquidated ... There's a massive correction going on, and when volatility gets that high, you can't find safety or comfort anywhere," said Phillip Streible, chief market strategist at Blue Line Futures in Chicago.

Hotter-than-expected U.S. CPI data on Friday led to traders now betting on a total of 175 basis point (bps) in rate hikes by September, with some seeing a chance for a 75 bps move this week.

Gold hit a one-month trough of $1,824.63 post the inflation data, but rebounded strongly as economic concerns took centre stage. That volatility has extended into Monday with bullion beating a sharp retreat from a one-month high hit during the Asian session.

The quick unwinding in gold highlights the current tug-of-war between its pricing drivers, with firm inflation being countered by bets for aggressive policy responses, J.P. Morgan said in a note.

A bullish gold outlook would require more signs that economic growth is cracking under the strain of higher inflation, the note added.

Palladium was last down 5.5% at $1,828.92 per ounce. Silver fell 3% to $21.22 an ounce and platinum retreated 3.6% to $938.31.

Michael Hewson, chief market analyst at CMC Markets UK, said in a note that demand concerns due to fresh COVID restrictions in China precipitated sharp falls in autocatalysts platinum and palladium.

MORE METALS NEWS
July 01,2022 08:00 AM
Copper prices slumped on Friday to their weakest in 17 months as inflation data reinforced fears that central bank tightening would push economies into a recession and hit metals demand.
June 30,2022 08:00 AM
Copper prices fell on Thursday to log their biggest quarterly slump since 2011 as COVID lockdowns in China and slowing economic growth curtailed demand.
June 29,2022 09:00 AM
South Korean battery maker LG Energy Solutions (LGES) (373220.KS) said on Wednesday it had entered into a non-binding deal for battery-grade lithium supply with Compass Minerals (CMP.N) while negotiations for a final agreement were ongoing.