Gold and silver futures fell to their lowest level since mid-March following a wave of interest-rate hikes from central banks, including a surprise 50 basis point hike from the Bank of England, as well as more hawkish commentary from Federal Reserve Chairman Jerome Powell.
Price action
-
Gold futures for August delivery
GC00,
-1.01% GCQ23,
-1.01%
were off by $21, or 1.1%, to $1,923 per ounce on Comex. -
July silver
SI00,
-1.45% SIN23,
-1.45%
fell by 37 cents, or 1.5%, to $22.44 per ounce. -
September palladium
PAU23,
-4.78%
fell by $59, or 1.1%, to $1,330 per ounce, reaching the lowest level for a most-active contract since mid-2019, according to FactSet data, while July platinum
PLN23,
-2.36%
declined by $4.40, or 0.5%, to $944 per ounce, reaching the lowest level for a most-active contract since February. -
Copper for July delivery
HGN23,
-0.74%
shed 4 cents, or 0.9%, to $3.88 per pound.
Market drivers
A number of interest-rate hikes from global central banks helped to weigh on gold and silver prices on Thursday following more hawkish commentary from Federal Reserve Chair Jerome Powell on Wednesday.
The Bank of England delivered a surprise 50 basis point rate hike, which was larger than economists had anticipated as the central bank struggles to tame the highest inflation in the G-7. Central banks in Switzerland and Norway also increased rates, as did Turkey’s central bank, which delivered a sizable hike of its own.
“Central banks are in focus late this week and they are still leaning hawkish on their monetary policies. That is bearish for the precious metals markets, both from a demand perspective and as it makes the competing asset class of government bonds more attractive as yields are rising,” said Jim Wyckoff, senior analyst at Kitco.com, in emailed commentary.
Adding to the hawkish sentiment, Fed Chair Powell returned to Capitol Hill for a second day of testimony on Thursday, where he said that a “strong majority” of policy makers support “a couple” more interest-rate hikes later this year — although the timing of any further rate-hike decisions will depend on how economic data develop.
Gold has slipped since last week, when the Fed opted to leave interest rates on hold after 10 consecutive rate increases while signaling that more hikes likely lie ahead.
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