Gold prices ended at a one-month low Wednesday, down a fourth-straight session, as the dollar index and Treasury yields gained, dulling investment demand for the precious metal.
April gold GCJ8, +0.19% dropped $14.90, or 1.1%, to settle at $1,314.60 an ounce. That was the lowest finish for a most-active contract since Jan. 9 and largest single-session dollar and percentage loss since Nov. 20, according to FactSet data. Gold has failed to draw a significant bid in the wake of a spike in volatility for riskier assets, with some investors selling gold for liquidity in the wake of the stock retreat.
Meanwhile, March silver SIH8, +0.18% lost 34.2 cents, or 2.1%, to $16.238 an ounce. The exchange-traded SPDR Gold Shares GLD, +0.15% fell 0.6% and the silver-focused iShares Silver Trust SLV, +0.32% lost 1.6%.
"It is hard to say where gold goes from here given that direction in the U.S. stock market remains unclear despite Tuesday's impressive recovery," Edward Meir, an independent commodity consultant at INTL FCStone, wrote in a recent note.
"All we can say is that gold did not particularly perform well when stocks were melting down, while seeming to crumble rather effortlessly in the aftermath of Tuesday's sharp rally," he said. "This may tell us that the gold complex is more vulnerable to the downside at this stage, especially if the stock market stabilizes."
On Wednesday, stocks traded mostly higher after earlier declines as gold prices settled, looking set to extend the rally from Tuesday as they recover from a multiday bout of massive volatility.
The ICE Dollar Index DXY, -0.03% was at 90.315, up 0.8%, putting pressure on dollar-denominated gold prices.
The yield on 10-year Treasury notesTMUBMUSD10Y, +0.58% rose to 2.83%, after having fallen to a nadir at 2.648% earlier in the week. Investors have shown concerns about intensifying stock-market instability and a pickup in inflation.
The 10-year yield rise comes after a January 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. 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.
Still, some market participants emphasized that gold and other commodities are holding up well relative to stocks.
"The stock market is crashing on fears of inflation and higher interest rates, but commodities and especially gold, have survived relatively unscathed as they are uncorrelated," said Will Rhind, chief executive of GraniteShares. "Gold is also outperforming bitcoinBTCUSD, -4.18% which to me reinforces that holding commodities in a portfolio is an important risk-management tool."
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In other metals action, March copper HGH8, -0.10% fell 3.2%, to $3.088 a pound. April platinum PLJ8, -0.02% lost 1.3%, at $981.70 an ounce. Palladium's March contract PAH8, -0.05% fell 1.8% to $984.55 an ounce, for a third consecutive decline and its lowest finish since early December.
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