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Metals Stocks: Gold futures settle below $1,800 for a 4th straight session

Gold futures declined on Monday, with prices for the haven metal settling below $1,800 an ounce for a fourth session in a row — failing to find much support even as the emergence of a new coronavirus variant sparked a U.S. stock market selloff on Black Friday.

Only a global lockdown caused by the omicron variant will impact precious metals, stocks and bonds, Chintan Karnani, director of research at Insignia Consultants, told MarketWatch. Gold is likely to break past the $1,900 level and climb to nearly $2,000 if there is any indication of an “omicron-induced lockdown in Europe, UK and North America,” he said.

“Traders have booked profit in gold long positions to meet margin calls in stocks and bonds,” said Karnani. “Gold has not risen as traders find more value in stocks.”

The metal’s inability to trade over $1,800, despite news of the new coronavirus variant, is “partially responsible for gold [prices] to trade with a softer bias or fall,” he said.

On Comex Monday, the most active February gold contract
GCG22,
-0.23%

GC00,
-0.25%

edged down by $2.90, or 0.2%, to settle at $1,785.20 an ounce. December gold
GCZ21,
-0.25%
,
the front-month contract, lost $3.20, or 0.2%, to end at $1,782.30 an ounce.

Based on the most actively traded contracts, prices fell 3.6% last week and haven’t settled above $1,800 since Nov. 22, FactSet data show.

Trading on Friday saw gold rise but most of its early gain receded in a shortened session the day after Thanksgiving, as the World Health Organization’s technical advisory group declared omicron a “variant of concern,” with several countries imposing flight bans from countries in southern Africa.

The big question for the market is the “interest rate outlook of key central banks for next year” in light of the new omicron coronavirus variant,” said Karnani. A delayed interest rate hike expectation for 2022 “will cause stock prices and inflation to rise,” he said.

Treasury yields were rising Monday as U.S. benchmark stock indexes were mixed in the wake of their worst day in more than a year on Friday.

Also on Comex, the most-active March silver contract
SIH22,
-1.43%

SI00,
-1.57%

fell 1.2% at $22.852 an ounce.

March copper
HGH22,
+1.20%

tacked on 1.2% to $4.341 a pound. January platinum
PLF22,
+0.70%

rose 1.1% to $964.50 an ounce and March palladium
PAH22,
+0.24%

settled at $1,789.20 an ounce, up nearly 0.5%.

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