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Metals Stocks: Gold prices finish lower after back-to-back session gains

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Gold futures headed lower on Monday, after posting gains over the last two trading sessions and ending last week higher for the first time in six weeks.

Price action

Gold futures for August delivery
GC00,
-0.73%

GCQ22,
-0.73%

were down $10.50, or 0.6%, at $1,716.90 per ounce.

September silver
SIU22,
-1.60%

SI00,
-1.60%

was down 30.7 cents, or 1.7%, at $18.31 per ounce.

September palladium
PAU22,
-0.53%

lost $24.30, or 1.2%, at $1,994.50 per ounce, while October platinum futures
PLV22,
-0.01%

traded at $863.70 per ounce, down $3.50, or 0.4%.

September copper
HGU22,
+0.21%

tacked on 1.4 cents, or 0.4%, at $3.363 per pound.

What analysts are saying

“July has proven to be a tough month for gold with the dual pressures of rising interest rates reducing gold’s appeal due to its lack of yield,” Rupert Rowling, market analyst at Kinesis Money, wrote in a Monday note.

The hawkish policies of the Federal Reserve have resulted in the U.S. dollar “strengthening to near record levels — which has increased the negative environment for gold given its typically inverse correlation with the greenback,” he said.

The ICE U.S. Dollar Index
DXY,
-0.15%
,
a measure of the greenback’s strength against a basket of its main rivals, was down 0.5% at 106.24 in Monday dealings, but traded roughly 1.5% higher month to date.

The final week of July “brings the prospect of further pain still with the Fed’s latest decision,” he said. Fed officials are expected to raise the fed-funds rate by 0.75 percentage points at their meeting on July 26-27.

Read: How high will the Fed have to push up interest rates to cool down inflation? No one knows

“If gold can survive the week largely intact, then the hope will be that inflation figures will finally show signs of having peaked and therefore, the central banks can tone down the aggressiveness of their actions, giving gold breathing space over the course of the second half of the year,” said Rowling.

Gold had tumbled to its weakest level in roughly 16 months, while silver had traded at its lowest level in two years, before precious metals prices rebounded last week.

Risk sentiment appeared mixed in Monday trading, with Asian equity markets ending mostly lower, while European markets were mostly in the green. U.S. benchmark stock indexes were mixed.

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