Commodity Blog

Gold futures are retreating from their one-week highs to kick off the trading week. The overall metals market is taking a nosedive on Monday, driven by a rising US dollar and bullish data that helped push equities higher.

June gold futures tumbled $7.40, or 0.57%, to $1,281.40 per ounce at 15:41 GMT on Monday. Gold surged to a one-week high on Friday after enjoying a four-session winning streak, which helped it post a modest 0.3% weekly gain last week. But the yellow metal is still down by roughly 1.25% on the year.

Silver, the sister commodity to gold, is also plunging to start the trading week as the white metal slipped below the crucial $15 threshold. July silver futures fell $0.15, or 1.00%, to $14.94 an ounce. Silver prices recorded a 0.7% weekly decline, adding to their year-to-date-loss of 5%.

The metals market took a significant hit on a rising US dollar as the greenback jumped 0.06% to 98.14. The currency posted an admirable 0.7% weekly gain last week. A stronger buck is bad for dollar-denominated commodities because it makes it more expensive for foreign investors to purchase.

US and Chinese data are driving global markets on Monday.

The world’s largest economy reported a 3.2% gross domestic product (GDP) in the first quarter. While this was better than expected, the underlying data raised some eyebrows, including weaker consumer spending, disappointing final sales to domestic purchasers, and slumping business fixed investment. But it appears investors are concentrating on inflation – or the lack thereof. Inflation fell to a 1.4% annual rate in the January-to-March period, down from 1.9% in the previous quarter.

China, the world’s second-largest economy, saw industrial profits surge for the first time since December.

Traders will now look ahead to the next Federal Reserve policy meeting, as well as crucial US economic data, including core inflation and payrolls.

The market is ostensibly more bullish on the global economy than on gold bullion. According to the US Commodity Futures Trading Commission (CFTC), hedge funds and money managers increased their net short positions in gold for the week ending April 23.

In other metal markets, July copper futures were flat at $2.885 per pound. July platinum futures slid $7.70, or 0.85%, to $895.90 an ounce. July palladium futures crashed $89.10, or 6.16%, to $1,358.10 per ounce.

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