WASHINGTON (dpa-AFX) - Gold prices fell sharply on Monday as bond yields climbed higher on hawkish comments from the central bank, and on recent strong economic data.
Also, the yellow metal's safe-haven appeal waned a bit amid easing tensions in the Middle East.
Chicago Federal Reserve President Austan Goolsbee said on Friday that it makes sense to keep policy on hold because of 'stalled' progress on inflation.
Gold futures for April ended down by $66.20 or about 2.76% at 2,332.20 an ounce, recording the steepest single-session drop in dollar terms in nearly three years. Percentage wise, the commodity suffered its biggest single session drop in over 14 months.
Silver futures for April ended lower by $1.595 or about 5.5% at $27.213 an ounce.
Investors also looked ahead to some key U.S. economic data, including reports on new home sales, durable goods orders and personal income and spending.
The Commerce Department's personal income and spending report includes readings on inflation said to be preferred by the Federal Reserve.
S&P flash U.S. services PMI and S&P flash U.S. manufacturing PMI readings for April will be released on Tuesday. On the first quarter GDP data is due.
On the geopolitical front, fears of a wider Middle East conflict ebbed, given Iran's tamed response to Israel's apparently small strike against the country.
Market participants dialed back risk premiums after Iran and Israel completed 'measured' counterattacks that were calibrated to avoid any casualties.
It is now becoming clear that both countries are not interested in an actual war, which could result in further escalation in the conflict.
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