Gold collapses after 4-day rally as Fed minutes emerge

Precious metals slipped on Wednesday after a four-day gaining streak as investors braced for the release of minutes from the Federal Reserve’s two-day meeting earlier this month.

gold for June delivery GC00,
down about 1.1% or $20.60 to $1,844 an ounce while silver SI00,
was down 0.8%, or 17 cents, to $21.89 an ounce.

While precious metals like gold have historically been viewed as safe haven assets, they have tended to trade in the same direction as stock indices in recent months. On Wednesday, gold and silver remained lower while US stocks were mostly higher after the market open, despite the fact that government bond yields, which move inversely with prices, were down.

Marshall Gittler, head of investment research at BDSwiss, said the dynamics in the markets are confusing: “Gold and silver are being traded as ‘risky assets’ these days.” Both gold and stocks were under pressure on Wednesday, but the precious metals have strengthened oriented towards the direction of the dollar, DXY, lately.
that was on the win again.

The U.S. dollar is on a “corrective jump,” senior analyst Jim Wyckoff said in a note Wednesday, adding that trading could be muted until the 2 p.m. Fed minutes release. “The market is looking for further guidance on the timing and pace of the Fed’s monetary tightening cycle, as well as the inflation outlook.”

The metals mostly retreated across the complex but with the palladium futures PA00,
Up 0.4% to $1,994.50 an ounce during Platinum Futures PL00,
lost 0.6% to $937.50 an ounce.

Also industrial metals such as copper HG00,
were down on the day, with futures down 1.3%, or 6 cents, to $4.25 a pound. Gold collapses after 4-day rally as Fed minutes emerge

Brian Lowry

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