(This Aug. 5 story has been corrected to fix the milestone in paragraph 8, and to say that palladium hit its lowest levels since July 2017, and not August 2018, in the first bullet )
By Anushree Ashish Mukherjee
(Reuters) – Gold fell more than 1% on Monday, caught in the slipstream of a global, wider market sell-off driven by mounting economic concerns, although analysts said this would be a temporary correction for the safe haven.
After dropping as much as 3.2% earlier in the session, spot gold pared some losses to trade 1.6% lower at $2,404.53 an ounce by 14:00 p.m. ET (1800 GMT).
U.S. gold futures settled 1% lower at $2,444.4.
Spot silver was down 5.1% at $27.10.
Wall Street tumbled, as fears of the United States tipping into recession following weak economic data last week rippled through global markets. [.N] [MKTS/GLOB]
“Investors are spooked and they’re selling what they can, and that includes gold and silver,” said Jim Wycoff, senior analyst at Kitco Metals.
The sell-off in autocatalysts platinum and palladium also reflected deepening concerns over industrial demand.
Platinum fell 4.9% to $911.10 and palladium lost 5.7% to $839.50 after hitting its lowest since July 2017. The two metals are used in engine exhausts to reduce emissions.
While gold is considered a safe refuge during such uncertainties, it was not immune to Monday’s sell-off as investors dumped assets across the board.
“What you’re seeing is just risk assets across the board under pressure this morning and gold is falling prey to that same pressure,” said David Meger, director of alternative investments and trading at High Ridge Futures.
Treasury bonds, meanwhile, were in demand, with U.S. 10-year yields touching the lowest since mid-2023 as fears of a recession worsened after a bleak July payrolls report. [US/]
However, analysts said gold, which has risen more than 16% thus far this year, could regain its footing looking ahead, given the persistent economic and political uncertainties and also on expectations of interest rate cuts from the Federal Reserve, which should bode well for the zero-yield bullion.
“Elevated geopolitical tensions and recent hopes for even greater Fed rate cuts should create supportive conditions for bullion. Ultimately, gold should be able to post a new record high once nerves settle,” said Han Tan, chief market analyst at Exinity Group.
(Reporting by Anushree Mukherjee and Ashitha Shivaprasad in Bengaluru; editing by Arpan Varghese, Vijay Kishore and Jonathan Oatis)
