Gold futures headed lower on Monday, with strength in the U.S. stock market led by gains in technology stocks, prompting prices for the metal to ease back after settling last week at their highest since late February.
A collapse in the Turkish lira, meanwhile, also contributed to losses for gold, with the weaker currency likely to dull gold demand from Turkey, analysts said. A report from the World Gold Council in January showed that Turkey was the biggest annual gold buyer in 2020, adding 134.5 metric tons to its official gold reserves.
Against the backdrop, gold for April delivery fell $9.20, or 0.5%, to trade at $1,732.50 an ounce, after prices saw a 1.3% weekly rise put in on Friday–the second weekly gain in a row. Prices on Friday also finished at the highest for a most-active contract finish since Feb. 25.
Bullion’s move lower to start the week comes even as U.S. Treasury yields and the dollar are staging a modest pullback that would ordinarily offer a runway for gold prices.
The 10-year Treasury note was down at around 1.679%, compared with 1.729% on Friday, while one measure of the dollar was off 0.1%, as measured by the ICE U.S. Dollar Index.
Commodity experts speculated that gold prices were facing selling pressure, nonetheless, because investors were favoring equities as the rise in bond yields appeared to stabilize somewhat. The technology-heavy Nasdaq Composite Index led on Monday.
Gold and silver prices were “pressured by some fresh chart-based selling and by global stock markets that are stable amid bond yields declining a bit to start the trading week,” wrote Jim Wyckoff, analyst at Kitco.com, in a daily note.
Meanwhile, May silver fell 62 cents, or 2.4%, to trade at around $25.70 an ounce, following last week’s 1.5% weekly climb. Based on the most-active contracts, prices were poised for their lowest settlement since March 8, FactSet data show.
Silver, as well as platinum, are taking their cue from gold Wednesday, “slipping with the yellow metal amid the central-bank turmoil at its No.5 consumer nation, Turkey,” Adrian Ash, director of research at BullionVault, told MarketWatch.
Turkey’s currency and stocks collapsed after the abrupt termination of its central bank head.
Among the Comex metals, April platinum fell 1.2% to $1,185.90 an ounce. June palladium shed 1.5% to $2,592 an ounce, but May copper edged up by nearly 0.2% to $4.12 a pound.
“Broader commodity markets are also trying to rally after taking fright at the rise in borrowing costs spurred by their own bull market,” said Ash. That can contribute to losses for haven gold.