Gold futures settled lower Monday after tallying gains in each of the last three trading sessions, with investors looking ahead to a busy week for Federal Reserve policy and key U.S. jobs data.
Palladium, meanwhile, suffered its biggest one-day decline since March, as prices retreated in the wake of four consecutive sessions of gains.
Gold for June delivery GCM9, -0.14% fell $7.30, or 0.6%, to settle at $1,281.50 an ounce. The most-active contract logged a weekly gain of 1% for last week. May silverSIK9, -0.13% fell 16.1 cents, or 1.1%, to end at $14.844 an ounce after gaining 0.3% last week. July silver SIN9, -0.19% which is now the most-active contract, settled at $14.933, down 15.5 cents, or 1%.
Monday data showing that profits at Chinese industrial firms grew for the first time in four months set a relatively upbeat tone for riskier global stock markets, nicking precious metals prices. Some strength in the U.S. stock market also helped to dull investor interest in gold.
"Since quite some time it's been a risk friendly market, with equities on the rise. Gold prices are also trading below a very important level of $1,300, which is weighing on the market," Commerzbank analyst Eugen Weinberg said.
The ICE U.S. Dollar IndexDXY, -0.03%which tracks the value of the buck against six of its trading rivals, was down 0.1% Monday as gold futures settled, but held ground near its highest level in about two years. The 10-year Treasury note yield TMUBMUSD10Y, +0.00% was up at 2.539%, while the Dow Jones Industrial Average DJIA, +0.15% and the S&P 500 index SPX, +0.10%
Strength in appetite for risky assets, like stocks, can weigh on haven gold, while the dollar's recent uptrend can make gold relatively more expensive to international buyers. Separately, rising bond yields can also dull the luster of gold and other commodities, which offer no yield.
Gold futures finished higher Friday and for last week after a quarterly reading of the pace of growth of the U.S. economy came in better than expected for the first three months of the year, up 3.2%. But details of the report raised questions about the underlying strength of the economy. There was little fresh evidence in the report to suggest the Federal Reserve would crank up interest-rate hikes soon.
Federal Reserve policy makers are fully expected to leave interest rates on hold when they conclude a two-day meeting on Wednesday. But the statement and Chairman Jerome Powell's remarks will be closely watched for clues to their thinking.
Some investors continue to look for the Fed to cut rates before the end of the year, even after data Friday showed the U.S. economy started 2019 on a stronger-than-expected footing. That's because underlying components of the report on first-quarter gross domestic product appeared less impressive and, moreover, due to continued signs that inflation remains subdued. The government's estimate of April jobs growth is due on Friday.
Read: After a sterling first-quarter GDP number, rate-cut bets gain steam - what gives?
Rounding out trading, the SPDR Gold Shares exchange-traded fund GLD, +0.31% fell 0.4% and the miner-focused VanEck Vectors Gold Miners ETF GDX, +0.24% shed 2.4%.
Among other metals, palladium saw the biggest move among major Comex metals, with its June contract PAM9, -0.74% dropping $85.20, or 5.9%, to settle at $1,362 an ounce, after a sizable 3.5% advance for last week. That was the biggest one-day dollar and percentage decline since March 28, FactSet data show.
"No fresh fundamental news could be found to explain the steep downdraft, which is most likely chart-based selling pressure that included sell stop orders being triggered when prices dropped below key support at the $1,400.00 level," said Jim Wyckoff, senior analyst at Kitco.com, in a market update.
May copper HGK9, -0.02% rose 0.3% to $2.895 a pound after a weekly loss of 1.1%. The July copper contract HGN9, +0.15% which is now the most active, added 0.1% to $2.897. July platinum PLN9, -0.15% fell 0.3% to $901.30 an ounce after it slipped last week.
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