Metals Stocks: Gold slumps after 4-day rally as Fed minutes loom

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Precious metals retreated on Wednesday after a four-day streak of gains as investors braced for the release of the minutes from the Federal Reserve’s two-day meeting from earlier this month.

Gold for June delivery
GC00,
-0.69%

retreated nearly 0.7%, or $12.20, to $1,853 an ounce ahead of the US market open, while silver
SI00,
-1.53%

retreated 1.4%, or 34 cents, to $21.73 an ounce.

While precious metals like gold have historically been seen as safe haven assets, in recent months, it has tended to trade in the same direction as equity indexes. On Wednesday, gold and silver futures were retreating alongside equity futures, and despite the fact that Treasury yields, which move inversely to prices, were on the downswing.

Marshall Gittler, head of investment research at BDSwiss, said the dynamic across markets was puzzling: “Gold and silver are trading as ‘risky assets’ nowadays. With risk sentiment falling this morning, as shown by the decline in the S&P 500 futures before the opening, they would naturally tend to come off as well. This despite the fact that US interest rates are coming off too, which should in theory be positive for the precious metals.”

Indeed, metals were retreating across the complex, with palladium futures
PA00,
-1.16%

down 0.2%, or $4.60, to $1,982 an ounce, while platinum futures
PL00,
-1.74%

shed 1.2%, or $12.20, to $930 an ounce.

Even industrial metals like copper
HG00,
-1.80%

were off on the day, with futures down 1.7%, or 7 cents, to $4.2 a pound.

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