Gold futures are trading higher to kick off the trading week, but they were unable to take full advantage of the
April gold futures rose $1.39, or 0.10%, to $1,338.70 per ounce at 16:37 GMT on Monday. Gold prices shed 1.4% last week, stemming from a strong jobs report, wage data, and a bullish Federal Reserve.
Silver, the sister commodity to gold, is posting modest gains to start the trading week. March silver futures tacked on $0.04, or 0.25%, to $16.75 an ounce. The white metal also recorded a 2.5% weekly decline.
Continuing Friday’s
We [are] always concerned when the market loses any value, but we [are] also confident in the economy’s fundamentals.
The precious metals’ gains were capped on a strengthening US dollar as the greenback jumped 0.3%. A stronger US dollar is bad for commodities like gold and silver because it makes it more expensive for foreign investors to purchase.
Moreover, the 10-year US Treasury note yield slipped 0.13%, trading at levels unseen since 2014. Following the labor report that found the US economy added 200,000 jobs and that wages surged 0.3%, traders immediately hit the panic button on inflation. With inflation figures beginning to increase, investors believe the US central bank will raise interest rates faster than expected.
The Federal Open Market Committee (FOMC) will hold its next policy meeting in March. According to the CME Group FedWatch tool, there is an 80% chance of a rate hike. It is also the first FOMC meeting with Jerome Powell at the helm of the Fed.
Precious metals were hit by the Institute of Supply Management (ISM)
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