Gold logs a 5th straight monthly decline, its longest losing streak in 4 years

Gold and silver prices softened for a fourth straight day on Wednesday. JOEL SAGET/AGENCE FRANCE-PRESSE/GETTY IMAGES

Gold and silver prices softened for a fourth straight day on Wednesday as traders bet that the Federal Reserve is likely to keep benchmark interest rates higher for longer following Fed Chairman Jerome Powell’s Jackson Hole speech last Friday.

Meanwhile, gold ended the month of August with its 5th straight monthly decline — its longest monthly losing streak in about four years.

Price action

Gold futures GCZ22 GC00, +0.78% for December delivery were down $10.10, or 0.6%, to settle at $1,726.20 per ounce on Comex. Prices for the most-active contract fell 3.1% for the month, down a fifth consecutive month — the longest monthly losing streak since the six month drop ended Sept. 2018, according to Dow Jones Market Data.

Silver futures SIZ22, +0.16% SI00, +0.16% for December delivery retreated 40 cents, or 2.2%, to $17.882 per ounce, for a monthly loss of 11.5%.

December palladium PAZ22, -0.20% fell $8.90, or 0.4%, to $2,078.90 per ounce, down 2.4% for August, while October platinum prices PLV22, -0.01% lost $5.10, or 0.6%, to $827 per ounce, for a monthly decline of 7.1%.

December copper HGZ22, -0.37% shed 3 cents, or 0.9%, to $3.5185 per pound. Prices were down 1.5% for the month, also their fifth monthly loss in a row.

What analysts are saying

In a “tug of war” game between gold and silver prices on the one end, and higher interest rates and a strong U.S. dollar on the other end, the two precious metals have lost the battle, Adam Koos, president of Libertas Wealth Management Group, told MarketWatch.

 

“Until we start to see rates ease, the dollar fall, and a ‘real’ recession poke its head above the surface, I think we’ll continue to see lower metals prices,” he said.

Powell’s speech on Friday drove Treasury yields and the dollar higher, dulling the luster of the yellow metal.

“The catalyst for gold’s reversal in fortunes was the switch in policy by the Federal Reserve to a more hawkish monetary policy in April that has resulted in a series of interest rate hikes in recent months as well as a reduction of the amount of the debt it holds,” said Rupert Rowling, a market analyst for Kinesis Money.

The 10-year Treasury yield TMUBMUSD10Y, 3.198% was up 1.3 basis points at 3.124% in Wednesday dealings, while the ICE Dollar Index DXY, -0.07%, a gauge of the dollar’s strength against a basket of rivals, was up 0.1%.

Gold and silver both ended the month with a loss, down a fifth straight month, and of the two metals, silver has significantly underperformed gold this month.

Read: Gold is down 15% from its record high but here’s why it may still be key to a diversified portfolio

“These metals have been on the struggle bus since early March, and when the weak hands start to hit the sell button across the board, if one holds up, it’s going to be the camp that has its own church,” Koos said.

“The bigger, more loyal fanatics are without a doubt, the congregation of the church of latter day gold bugs,” he said, highlighting the yellow metal’s popularity with investors over silver.

Time to buy Gold and Silver on the dips

Tim Moseley