Metals Stocks: Gold futures end lower, match longest string of losses in over 3 weeks

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Gold futures on Monday settled with a loss for a third straight session, marking the longest period of declines for bullion in nearly a month and extending last week’s slump following a weaker-than-expected September jobs report.

“Gold investors seem to have come around to agreeing with the rest of the market’s interpretation of the September jobs number, basically that it wasn’t bad enough to derail the [Federal Reserve’s] plans to taper very soon,” said Brien Lundin, editor of Gold Newsletter.

“Essentially, the Fed has been pushed into a corner by its own rhetoric over the last few months,” he said in comments to MarketWatch. “The markets now expect the Fed to taper by December, and the truly stunning move (and message) would be if they don’t for some reason.”

On Monday, gold for December delivery
GC00,
-0.13%

GCZ21,
-0.13%

fell by $1.70, or 0.1%, to settle at $1,755.70 an ounce on Comex, though prices did spend some time trading higher to touch a high of $1,761.10. The settlement for the most-active contract was the lowest since Sept. 29, FactSet data show. The drop matched the longest skid for the most-active contract since a three-session period of declines ended Sept. 17.

Prices had fallen by 0.1% in a choppy Friday session after data showed the U.S. economy added just 194,000 jobs last month, compared with average economists’ estimates for 500,000.

December silver
SIZ21,
-0.35%

inched down by 4 cents, or 0.2%, at $22.665 an ounce.

Gold initially rallied Friday as Treasury yields fell in the wake of the jobs report. A subsequent turnaround by yields, however, with the rate on the 10-year Treasury note
TMUBMUSD10Y,
1.612%

reversing back above 1.6% took the wind out of the metal’s sails, analysts said. Higher Treasury yields raise the opportunity cost of holding a nonyielding asset like gold.

The Treasury market is closed Monday for a federal holiday, though most other financial markets remain open.

Yields rose Friday because the Fed is still seen as likely to announce next month that it’s ready to begin scaling back its monthly bond purchases, said Carsten Fritsch, analyst at Commerzbank, in a note.

While the payrolls number was disappointing, rising wages and a fall in the unemployment rate point to a tight labor market, which could stoke inflationary pressures, he said in a note.

“This should also argue in favor of an imminent tightening U.S. monetary policy and will probably prevent the gold price from rising towards the $1,800 mark,” Fritsch wrote. “In fact, gold faces more in the way of downside risks in the short term if it falls below the $1,750 mark.”

In other metals trading, December copper
HGZ21,
+2.01%

tacked on 2.1% to end at $4.367 a pound. January platinum
PLF22,
-1.95%

shed 2.1% to $1,006.90 an ounce, while December palladium
PAZ21,
+1.88%

settled at $2,119.50 an ounce, up 2.2%.

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