Gold futures ended 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
on Comex, which is now the most-active contract, fell by $10.90, or 0.7%, to settle at $1,643.20 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.
meanwhile, dropped 40.2 cents, or 2.8%, to $14.132 an ounce, pulling back after posting a weekly climb of more than 17%—the largest weekly rise since April 1987.
“The gold market is a very unsettled place these days,” said Michael Kosares, founder of USAGOLD. “Some think that things will fall back in line after the April contract rollover, but if the bullion shortage continues, it’s anyone’s guess if that will happen.”
“From our perspective, gold demand is alive and well and could very well be just the tip of the iceberg,” he told MarketWatch, noting that demand for physical gold coins at USAGOLD is running at levels not seen since 2009.
“For the first time in a long while, I can say without reservation that retail investors have joined funds and institutions in the quest for the physical metal,” said Kosares.
Read Opinion: The economic and monetary conditions are perfect for gold
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 0.7% against a basket of a half-dozen currency rivals, as measured by the ICE U.S. Dollar Index
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 Monday as gold futures settled.
“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
lost 0.8% to $2.1555 a pound. July platinum
shed 2.4% to $723.80 an ounce and June palladium
settled at $2,197.60 an ounce, up 0.04%.