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Metals Stocks: Gold edges lower after back-to-back gains

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Gold futures ticked lower early Wednesday after back-to-back gains that saw the yellow metal bounce up from a three-month low.

Gold for June delivery
GC00,
-0.46%

GCM22,
-0.46%

fell $5.60, or 0.3%, to $1,813.300 an ounce on Comex, while July silver
SIN22,
-0.74%

was down 14.5 cents, or 0.7%, at $21.605 an ounce.

“We attribute the price slide on the one hand to higher bond yields in the wake of good U.S. economic data —- yields on 10-year U.S. Treasuries have risen to 3% again. And on the other hand, Fed Chair [Jerome] Powell’s hawkish remarks are likely to have played their part,” said Daniel Briesemann, commodity analyst at Commerzbank, in a note.

Higher yields raise the opportunity cost of holding nonyielding assets.

Powell, speaking at a Wall Street Journal event on Tuesday afternoon, said the Fed would keep raising interest rates until there was “clear and convincing evidence” that inflation was coming down. Powell said that, if necessary, the Fed wouldn’t hesitate to push rates past “broadly understood levels of neutral” to bring down inflation. The neutral rate is the level at which policy neither boosts nor slows economic growth.

Powell said that the fight against inflation could cause some pain in terms of economic growth or a tick up in unemployment but that “plausible” pathways remained for a “softish” landing.

In other metals trade, July copper
HGN22,
-0.87%

fell 0.9% to $4.20 a pound.

July platinum
PLN22,
+0.65%

rose 0.6% to $949.20 an ounce, while June palladium
PAM22,
+0.70%

was up 0.7% at $2,046.50 an ounce.

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