Gold futures plunged below $2,000 to end the raucous trading week. Investors have been taking profits early on hopes that the Ukraine-Russia conflict could be improving or, at the very least, it is not expected to escalate. With a stronger US dollar and rising Treasury yields, metal commodities could be taking a breather.
April gold futures tumbled $20.50, or 1.02%, to $1,978.80 per ounce at 14:51 GMT on Friday on the COMEX division of the New York Mercantile Exchange. Gold prices are poised for a tepid weekly boost of 0.25%, leaving their year-to-date gain above 8%.
Silver, the sister commodity to gold, is still above $26. May silver futures fell $0.141, or 0.54%, to $26.11 an ounce. The white metal will settle the trading week with a 0.9% boost, adding to its year-to-date rally to nearly 12%.
The broader financial markets were in positive territory Friday as investors continue to assess the situation in Eastern Europe, anticipating that geopolitical tensions will subside soon. But is this wishful thinking or based on reality?
Meanwhile, investors might have priced in higher inflation for February and March after the US annual inflation rate surged 7.9% last month. But the consumer price index (CPI) is almost certain to hit 8.4% this month.
On the data front, the University of Michigan’s consumer sentiment index dropped to 59.7, worse than the market forecast of 61.4. Consumer expectations slumped to 54.4, while current economic conditions eased to 67.8.
The one- and five-year inflation expectations stood at 5.4% and 3%, respectively.
Bonds were mostly in the green to end the trading week, with the benchmark 10-year yield unchanged at 2.009%. The one-year bill edged up 0.016% to 1.171%, while the 30-year bond slipped 0.023% to 2.369%.
Gold is typically sensitive to a rising-rate environment because it lifts the opportunity cost of holding non-yielding bullion.
The US Dollar Index (DXY), which gauges the greenback against a basket of currencies, rose 0.25% to 98.75, from an opening of 98.36. The index is poised for a tepid weekly gain of 0.1%, increasing its 2022 jump to nearly 3%.
A stronger buck is generally bearish for commodities priced in dollars because it makes it more expensive for foreign investors to purchase.
In other metal markets, April copper futures were flat at $4.659 per pound. April platinum futures shed $6.90, or 0.63%, to $1,088.30 an ounce. May palladium futures cratered $159.50, or 5.46%, to $2,761.00 per ounce.