Metals Stocks: Gold prices settle lower after last week’s strong gains

Gold futures traded lower on Monday, weighed down by a climb in U.S. stocks and strength in the dollar, as traders eyed rapidly moving developments in the coronavirus pandemic and President Donald Trump’s extension of guidelines on measures meant to mitigate the spread of the virus.

“Gold’s supply chain for the physical metal was disrupted over the last 10-days, but that has now settled and taken away any momentum for higher prices,” said Edward Moya, senior market analyst at Oanda.

Read:Gold suffers pricing issues as coronavirus shuts down supply sources

Gold’s ‘outlook remains bullish as world adjusts to never-ending promises of monetary easing, but the next rally may be more of an escalator ride than elevator one.’

Edward Moya, Oanda

The precious metal’s “outlook remains bullish as world adjusts to never-ending promises of monetary easing, but the next rally may be more of an escalator ride than elevator one,” he said in a market update.

Gold for June delivery GCM20, -0.67% on Comex, which is now the most-active contract, fell by $10, or 0.6%, at $1,644.10 an ounce. Prices for the April contract, which is still among the more active, had climbed by 9.5% last week for the biggest weekly rise since September 2008, according to FactSet data.

May silver SIK20, -1.92%, meanwhile, dropped 21.4 cents, or 1.5%, to $14.32 an ounce, pulling back after posting a weekly climb of more than 17%—the largest weekly rise since April 1987.

Markets were digesting a Sunday news briefing where Trump extended social-distancing guidelines through April 30. The president had previously indicated a desire to begin lifting restrictions by Easter Sunday, on April 12.

Meanwhile, the U.S. dollar also was creating some friction for bullion prices. The buck was up 0.70% against a basket of a half-dozen currency rivals, as measured by the ICE U.S. Dollar Index DXY, +0.91%. A stronger dollar can be a weight on commodities priced in the unit, making them more expensive to users of other currencies. U.S. benchmark stock indexes also traded higher in Monday dealings.

“We are seeing a risk on day, almost a return to normal in a way as US equity markets are higher across most sectors,” said Jeff Wright, executive vice president of GoldMining Inc. “I do see this as a positive towards consolidation above the $1600 level” for gold.

Looking ahead, this week may offer “possible shocking economic data to boost safe haven demand,” he told MarketWatch. “Consumer confidence on Tuesday will be very bad, but it will get worse next time. Initial jobless claims on Thursday should [provide] another shocking number—my guess is well above [the] 3.28 million [claims] last week.”

Among other metals traded on Comex, May copper HGK20, -0.55% lost 0.9% to $2.1535 a pound. July platinum PLN20, -1.73% shed 2.6% to $721.90 an ounce and June palladium PAM20, +0.18% traded at $2,161 an ounce, down 1.6%.