Gold heads for 5th straight monthly decline, its longest losing streak in 4 years

Gold and silver prices softened for a fourth straight day on Wednesday as traders bet that the Federal Reserve is likely to keep benchmark interest rates higher for longer following Fed Chairman Jerome Powell’s Jackson Hole speech last Friday.

Meanwhile, gold is set to finish August with its 5th straight monthly decline — its longest monthly losing streak in about four years.

Price action
  • Gold futures GCZ22
    GC00,
    -0.49%

    for December delivery were down $910, or 0.6%, to $1,726.30 per ounce on Comex, with prices for the most-active contract down more than 3% for the month.

  • Silver futures
    SIZ22,
    -2.06%

    SI00,
    -2.06%

    for December delivery retreated 25.7 cents, or 1.4%, to $18.03 per ounce, eyeing a monthly loss of more than 11%.

  • December palladium
    PAZ22,
    -0.37%

    fell $19.80, or 1%, to $2,068 per ounce, while October platinum prices
    PLV22,
    -0.47%

    added $1.70, or 0.2%, to $833.80 per ounce.

  • December copper
    HGZ22,
    -0.69%

    shed 5 cents, or 1.4%, to $3.501 per pound.

What analysts are saying

In a “tug of war” game between gold and silver prices on the one end, and higher interest rates and a strong U.S. dollar on the other end, the two precious metals have lost the battle, Adam Koos, president of Libertas Wealth Management Group, told MarketWatch.

Powell’s speech on Friday drove Treasury yields and the dollar higher, dulling the luster of the yellow metal.

“The catalyst for gold’s reversal in fortunes was the switch in policy by the Federal Reserve to a more hawkish monetary policy in April that has resulted in a series of interest rate hikes in recent months as well as a reduction of the amount of the debt it holds,” said Rupert Rowling, a market analyst for Kinesis Money.

The 10-year Treasury yield
TMUBMUSD10Y,
3.119%

was up 1.3 basis points at 3.124% in Wednesday dealings, while the ICE Dollar Index
DXY,
-0.16%
,
a gauge of the dollar’s strength against a basket of rivals, was up 0.1%.

Gold and silver look to end the month with a loss, down a fifth straight month and of the two metals, silver has significantly underperformed gold this month.

Read: Gold is down 15% from its record high but here’s why it may still be key to a diversified portfolio

“These metals have been on the struggle bus since early March, and when the weak hands start to hit the sell button across the board, if one holds up, it’s going to be the camp that has its own church,” Koos said.

“The bigger, more loyal fanatics are without a doubt, the congregation of the church of latter day gold bugs,” he said, highlighting the yellow metal’s popularity with investors over silver.

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