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Gold futures edged to the downside in early trade Monday, adding to the previous week’s pullback.
Gold for April delivery
GC00,
GCJ22,
on Comex was down $2.20, or 0.1%, at $1,927.10 an ounce. The yellow metal declined 2.8%, last week, marking the biggest weekly percentage decline for a most-active contract since the week ended Nov. 26, according to Dow Jones Market Data.
May silver
SIK22,
was up 14.3 cents, or 0.6%, at $25.23 an ounce. Silver on Friday logged a 4.1% weekly decline, snapping a six-week streak of gains.
The Fed last week delivered a widely expected quarter-point rate increase and signaled it expected to deliver a total of 10 to 11 such hikes through the end of 2023. Some Fed officials have argued for the prospect of lifting rates by a half-point increment in the future, an option that Powell hasn’t ruled out.
“For short-term traders, gold has taken a back seat as markets try to assess the impact of disrupted supply chains and the amount of supply shortfall in raw materials and food. At the same time, medium-term traders should not lose sight of the fact that the current situation will not allow central banks to act adequately,” wrote Alex Kuptsikevich, senior market analyst at FxPro.
“As a result, the supply of fiat money will increase faster than the supply of commodities. In other words, we should expect greater tolerance for higher inflation from” central banks, he said. Governments should also be expected to provide financial support to the economy, which means a boost to the money supply and a higher ratio of public debt to gross domestic product, Kuptsikevich wrote.
Fed Chairman Jerome Powell is scheduled to speak at an economic conference at noon, while Atlanta Fed President Raphael Bostic is slated to speak Monday morning.
The Ukrainian government refused demands by Russia to surrender the southern port city of Mariupol as Russian forces continued to bombard Ukrainian cities. The demand by Russia came hours after Ukrainian authorities said Moscow’s forces bombed an art school that was sheltering about 400 people.
Stiff resistance has prevented Russian forces from making a quick takeover of the country. The Wall Street Journal reported that senior U.S. officials see signs Russia is adjusting its strategy to secure territorial objectives and use leverage to pressure Kyiv to accept neutrality between Moscow and the West.
