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Gold futures on Thursday posted their lowest year-to-date finish, a day after minutes of the Federal Reserve’s latest policy meeting affirmed that policy makers expect to push rates higher and keep them there.
Price action
-
Gold for April delivery
GC00,
-0.56% GCJ23,
-0.56%
fell $14.70, or 0.8%, to settle at $1,826.80 an ounce on Comex. Prices were down a fourth straight session and marked the lowest settlement for a most-active contract since Dec. 30, FactSet data show. -
March silver
SIH23,
-1.76%
lost 1.7% to close at $21.306 an ounce. -
April platinum
PLJ23,
-0.63%
declined by 0.8% to $945.50 an ounce. March palladium
PAH23,
-3.08%
fell 3.6% to close at $1,428.60 an ounce, while the June palladium contract
PAM23,
-3.43% ,
which is also among the most active, ended at $1,430.70, down 3.9%. -
March copper
HGH23,
-3.28%
shed 3.1% to $4.059 a pound.
Market drivers
Minutes of the Fed’s Jan. 31-Feb. 1 policy meeting released Wednesday afternoon affirmed that policy makers were solidly behind plans to continue raising rates, but offered no major surprises.
The minutes “confirmed what last week’s strong inflation data already told us: we’re stuck with higher interest rates and a strong dollar — a structural headwind for our commodity markets,” analysts at Peak Trading Research wrote in a note sent to traders.
“ The minutes “confirmed what last week’s strong inflation data already told us: we’re stuck with higher interest rates and a strong dollar — a structural headwind for our commodity markets.” ”
Treasury yields and the dollar
DXY,
have risen since the beginning of February as market participants have boosted expectations for Fed interest-rate increases. Rising yields raise the opportunity cost of holding nonyielding assets like gold, while a stronger dollar makes commodities priced in the unit more expensive to users of other currencies.
Gold is at a two-month low and “it will probably take confirmation that the economy is slowing down faster before prices can muster up a meaningful rally,” said Edward Moya, senior market analyst at OANDA, in a market update.
Also read: The real impact of Russia’s invasion of Ukraine on commodities
Still, data released Thursday showed that the U.S. economy grew slightly slower at a 2.7% annual pace at the end of 2022, according to revised government figures. The increase in gross domestic produce was reduced from an initial 2.9% growth rate.
Separately, the Labor Department reported that initial jobless claims fell by 3,000 to 192,000 in the week ending Feb. 18.
