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Metals Stocks: Gold ends lower Wednesday, breaks longest winning streak since April

Gold closed lower on Wednesday, ending a five-day winning streak that was its longest stretch of uninterrupted gains since April, as traders reconsidered the odds of a Federal Reserve pivot away from its aggressive plans for interest rate hikes.

How metals performed

Gold for December
GCZ22,
-0.60%

delivery shed $13.30, or 0.7%, to settle at $1,776.40 per ounce, marking the most-active contract’s sharpest daily percentage drop in three weeks, according to Dow Jones Market Data.

Silver for September delivery
SIU22,
-0.79%

fell 25 cents, or 1.2%, to close at $19.89 per ounce.

Palladium
PAU22,
-3.96%

for September delivery fell $82.30, or 3.9%, ending at $2,007.90 per ounce, while platinum
PLV22,
-1.57%

for October delivery shed 1.8%, to close at $888.50 per ounce.

Copper
HGU22,
-1.35%

for September delivery shed 5 cent, or 1.4%, finishing at $3.52 per pound.

What analysts said

Gold prices finished lower on Wednesday, as the dollar gained and Treasury yields rose, after Richmond Fed President Thomas Barkin added his voice to a chorus of U.S. central bankers backing an aggressive rate-hiking stance to help fight soaring inflation.

See: Top Fed officials back aggressive interest-rate hikes until inflation eases

“The primary driver for gold will be Wall Street’s assessment of how many more massive rate hikes that [the] Fed has left until they enter a period of keeping policy steady,” said Edward Moya, senior market analyst at Oanda, in emailed comments.

“It looks like the chances of a 75 basis-point rate increase at the September FOMC meeting are very much on the table and that might keep the dollar supported, which should make it hard for gold to rally above the $1800 level for now.”

Late Tuesday and again on Wednesday morning, St. Louis Fed President Jim Bullard said on CNBC’s “Squawk Box” that the Fed can hike interest rates without triggering a recession. Bullard also said he would like to see the high end of the Fed’s target rate at 4% by year’s end.

Hawkish Fed comments helped revive Treasury yields and the dollar, making gold less attractive by comparison. The 10-year Treasury yield BX:TMUBMUSD10Y was up 1 basis points to 2.76%, while the ICE U.S. Dollar Index DXY was 0.3% higher at 106.50.

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