Gold slumped to start the week and headed for a roughly 0.9% April drop, retreating as the dollar index looked set to close out its best month in more than a year.
The yellow metal’s drop comes even as closely tracked Treasury yields pulled back slightly from the 3% line in Monday trading. Nonyielding gold had lost some demand in favor of riskier assets.
Early Monday, June gold GCM8, -0.84% fell $8.50, or 0.6%, at $1,314.90 an ounce. The contract did end higher Friday, at $1,323.40 an ounce, bouncing off its lowest closing level since March 20. June gold notched a 1.1% drop for last week.
The ICE U.S. Dollar Index DXY, +0.35% was up 0.3% at 91.84. Its moves can influence appetite for dollar-priced commodities, including the yellow metal, to investors using other currencies. The index is on track for a 1.8% April gain, according to FactSet Data. That would be the strongest showing since February 2017, when it also rose 1.8%.
Still, gold’s back-and-forth has been restricted to a narrow trading range so far this year.
“The dollar strength is not having a lasting impact on the technicals of gold and coming into this week, there is little expectation that the range of support band $1,300/$1,310 will be broken,” said Richard Perry, analyst at Hantec. “During 2018, there has not been a closing session within or below $1,300/$1,310 as time and again the corrections have been bought into.”
Investors also have been tracking the 10-year Treasury yield TMUBMUSD10Y, -0.38% , which last week climbed above 3% for the first time since 2014, but then slipped back under that psychologically important level. A jump for that benchmark rate tends to peel money away from riskier assets such as equities.
Economic reports Monday include a look at personal income and spending, the April release on the Chicago area’s business conditions and a March report on pending home sales.
Check out: MarketWatch’s Economic Calendar
On the Federal Reserve front, no speeches are scheduled. The central bank’s policy makers are slated to start a two-day meeting on Tuesday, and they are expected on Wednesday to leave interest rates on hold and signal no change to a tightening path of two more rate hikes in 2018. However, that’s a course of action that some market participants believe is too slow to keep up with mounting inflation risks.
See: Why the Fed could make 4 rate hikes this year
The jobs report for April, set to be released next Friday, could keep market action limited in the days leading up to the release.
In addition, the prospect of a trade war between the U.S. and China is one of those worries, so traders are likely to watch U.S. Treasury Secretary Steven Mnuchin’s visit to China this week for high-level trade talks.
Elsewhere in the metals complex, May silver SIK8, -1.44% lost 9 cents, or 0.5%, to $16.31 an ounce. It is on track to wrap April just in positive territory. July silver SIN8, -1.41% which is now the most-active contract, shed 10 cents, or 0.6%, at $16.395. For last week, the May contract for silver declined by 4.6%, while the July contract fell by 4.2%.
Read: Global economic growth was a blessing and curse for 2017 silver demand
May copper HGK8, -0.43% was up 0.3% to $3.0535 a pound, while the more active July contract HGN8, -0.10% rose 0.3% to $3.0775 a pound. Copper’s contract for May logged a weekly decline of 2.8%, while July’s registered a weekly fall of 2.7%
July platinum PLN8, -0.92% fell 1.1% to $906.70 an ounce, with a weekly slide of 1.6%.
June palladium PAM8, -0.47% slipped 0.1% at $962.30 an ounce. The contract traded up nearly 1% month to date despite pulling back sharply in recent sessions. U.S. tensions with Russia, which threaten global supplies, have recently fueled strong weekly gains. For the week, however, the contract tumbled by 6.5%.
The SPDR Gold Shares GLD, -0.67% exchange-traded fund fell 0.8% and the iShares Silver Trust SLV, -1.05% fell 1%. The VanEck Vectors Gold Miners GDX, -1.30% fell 1.1%.