Gold and Silver See Monthly Gains, Weekly Losses

This week, investors continued to monitor an increasingly hawkish Fed, while also eying developments in Ukraine. Bullion prices were largely driven by yield movements, relative dollar strength, and geopolitical tensions. 

On Monday, Wall Street sentiment was slightly higher, following two weeks of stock market gains. As the week began, the S&P 500 continued with its upward momentum, while gold prices saw pressure from dollar gains. As a result, the yellow metal shed 1.6%, as prices closed around the $1,923 level. On the same day silver dropped by nearly 2% as it ended the trading day at $24.92.  

On Tuesday, dollar strength gave way to optimistic headlines regarding Ukraine-Russia negotiations. Russian officials hinted at a reduction in military action near the Ukrainian capital of Kyiv. Western intelligence confirmed Russian troop movements away from previously contested regions, and into non-combat zones in places such as Belarus. However, U.S. intelligence has indicated that the Russian withdrawal from those areas is a sign that the military is refitting and regrouping for later assaults within Ukraine. 

Nonetheless, gold and silver prices gave way to the optimistic headlines. On Tuesday, gold touched one-month lows of $1,891 while silver fought to stay above $24. Bullion prices would steady on Wednesday, as a more cautious mood was prevalent among investors. 

On Wednesday, U.S. equities ended their winning streak and the dollar index touched one-week lows. Yield curve inversions have also made headlines throughout the week, with the five and thirty-year Treasury yields inverting for the first time since 2006. Historically, yield curve inversions have preceded recessions in the U.S. 

Safe-haven demand supported a modest dollar uptick on Thursday. This, along with expectations of an increasingly hawkish Fed resulted in slight downward pressure for gold. However, bullion losses were minimal, with spot gold remaining near the $1,948 level as the month ended. Meanwhile, silver ended Thursday and the month around $24.79 an ounce. This marked a 1.5% monthly gain for gold and 1.6% March increase for silver prices. 

As the week drew to a close, investors eyed Friday morning’s scheduled release of Nonfarm payroll data. Economic data throughout the week such as jobless claims, consumer confidence, and the core PCE price index had largely met forecasts, further fueling hawkish Fed expectations. 

Friday morning saw U.S. Nonfarm payrolls rise by 431,000 against the forecast of 490,000. U.S. stocks were mixed following the payroll miss. Gold prices moved modestly lower against higher yields and a firmer dollar. Meanwhile, Bitcoin fell to a five-day low below $45,000, as risky assets suffered amid heightened uncertainty.  

Currently, gold is eying a 1.4% weekly drop, as prices are hovering near $1,928 an ounce. Silver is currently at $24.72 an ounce, which would be a weekly loss of 2.7%. While bullion enjoyed safe-haven demand and monthly gains, a stronger dollar a more hawkish Fed weighed on metals this week.