27th September 2022 – (New York) Gold futures on the COMEX division of the New York Mercantile Exchange fell on Monday as the U.S. dollar rose sharply.
The most active gold contract for December delivery fell 22.2 U.S. dollars, or 1.34 percent, to close at 1,633.4 dollars per ounce.
Gold closed at its lowest price since 1st April, 2020, as the U.S. dollar index rose to its fresh 20-year high and the U.S. 10-year Treasury yield climbed to its highest level since 2010.
Series of interest rate hikes by central banks last week have put gold under heavy pressure. Investors are waiting for a series of U.S. inflation data to be released this week.
With no prospect of central banks changing their course of aggressive monetary policy tightening in the coming months, the medium-term outlook for gold looks gloomy, market analysts hold.
The Chicago Fed National Activity Index fell to zero in August from a revised 0.29 in July, suggesting the economy expanded at its historical average growth pace.
Silver for December delivery fell 43 cents, or 2.27 percent, to close at 18.48 dollars per ounce. Platinum for October delivery fell 8.6 dollars, or 1 percent, to close at 850.1 dollars per ounce.
Meanwhile, oil prices fell on Monday, pressured by strength in the U.S. dollar.
The West Texas Intermediate (WTI) for November delivery decreased 2.03 U.S. dollars, or 2.6 percent, to settle at 76.71 dollars a barrel on the New York Mercantile Exchange. Brent crude for November delivery lost 2.09 dollars, or 2.4 percent, to settle at 84.06 dollars a barrel on the London ICE Futures Exchange.
The above moves came as an upward momentum in the U.S. dollar continued after the Federal Reserve enacted the third consecutive three-quarter-point rate hike last week and signaled a more hawkish path ahead.
The dollar index, which measures the greenback against six major peers, jumped 0.81 percent to 114.1030 in late trading on Monday, following a 1.65-percent surge in the prior session. Historically, the price of oil is inversely related to the price of the U.S. dollar.
For the week ending Friday, the U.S. crude benchmark dropped 7.1 percent, while Brent declined 5.7 percent, based on the front-month contracts.