Gold futures ended lower Monday, failing to rebound from last week's losses, as recent data showing stronger U.S. hiring and wages boosted the prospects for a more aggressive Federal Reserve approach to interest rates and continued to lift the dollar.
U.S. stocks traded sharply lower Monday, part of a broader global equity selloff, but didn't fuel any haven-related investment demand to the yellow metal.
"Should this rout in the stock market continue, gold may continue under pressure as the 'sell everything' to raise cash mantra unfolds," said Peter Hug, global trading director at Kitco Metals Inc.
April gold GCJ8, +0.00% edged down by 80 cents, or less than 0.1%, to settle at $1,336.50 an ounce. The contract shed 1.5% last week, according to FactSet data. That trimmed its year-to-date gain to 1.8%.
March silver SIH8, +0.33% shed 3.8 cents, or 0.2%, to $16.671 an ounce. It logged a 4.2% weekly decline last week. The exchange-traded SPDR Gold Shares GLD, -1.05% was up 0.2%, while the silver-focused iShares Silver Trust SLV, -0.57% added 0.8% in Monday dealings.
"Buying of gold [based on Commitment of Traders reports] continued for a seventh week, albeit at a modest pace," said Ole Hansen, head of commodity strategy at Saxo Bank. "This happened after the yellow metal once again found resistance above $1,350 an ounce, with an adverse spike in real yields only being partly offset by emerging stock market weakness."
Gold finished with a modest loss as the ICE U.S. Dollar IndexDXY, -0.02% moved up 0.3% to 89.47, after hitting three-year lows last week. Dollar-priced gold often moves inversely to the buck.
The yield on the 10-year U.S. Treasury note TMUBMUSD10Y, -0.16% turned lower Monday, but at one point reached as high as 2.883%.
The 10-year yield has been trading around levels last seen four years ago, after Friday's monthly jobs report revealed a jump in wage growth. That stoked inflation fears and, in turn, concerns that the Fed will increase interest rates faster than expected. Jerome Powell formally took over as chairman of the Federal Reserve on Monday, replacing Janet Yellen.
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Analysts have stressed that while inflation risk drives up bond yields in a way that could prove negative for nonyielding bullion, it also restores investor faith in gold as a hedge.
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Data showing that the Institute of Supply Management nonmanufacturing index surged in January to a 13-year high also put some pressure on gold prices Monday.
Meanwhile, Federal-fund futures reflect a nearly 80% probability of a quarter-percentage-point increase to a key interest rate at the March 20-21 Fed meeting, according to CME Group data. The Fed collectively has penciled in three total hikes in 2018, but the likelihood of that pace remains open to debate.
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In other metals action, March copper HGH8, +0.78% gained 1.1% to $3.221 a pound. April platinum PLJ8, +0.11% fell 0.4% to $995.50 an ounce. Palladium's March contract PAH8, +0.47% fell 1.2% to $1,032.95 an ounce.
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