Gold futures ended lower on Monday as the Group of Seven nations prepared to ban imports of the yellow metal from Russia.
U.S. President Joe Biden tweeted on Sunday that the G-7 would “ban the import of Russian gold” and the U.K. government has informed the press that the U.S., U.K., Japan and Canada had agreed to the ban — although the resolution has yet to be formally adopted by the supranational institution. Members of the G-7 were meeting Monday in the southern German town of Garmisch-Partenkirchen.
- Gold futures for delivery in August GCQ22, -0.33% GC00, -0.33% fell $5.50, or 0.3%, to settle at $1,824.80 per ounce after touching an intraday high of $1,842.80.
- Silver futures for July delivery SIN22, +0.21% SI00, +0.21% rose 4 cents, or 0.2%, to $21.168 per ounce.
- Platinum futures for July delivery PLN22, -0.02% settled at $904.10 per ounce, up 40 cents, or less than 0.1%. Palladium for September delivery PAU22, +0.44% rose $4.60, or nearly 2.6%, to $1,858.90 per ounce.
- Copper futures for July delivery HGN22, +0.17% added 2 cents, or 0.6%, to $3.7625 per pound. Prices for the most-active contract lost 6.8% last week, the largest weekly percentage loss since June of last year.
What analysts are saying
Industrial metals prices climbed Monday after sliding sharply last week as recession fears shook commodity prices, sending prices of everything from copper to crude oil CL.1, +2.33% to wheat W00, -1.79% lower.
The second quarter of 2022 is on track to be the worst quarter for base metals since the recession of 2008 and 2009, according to analysts from Commerzbank.
Meanwhile, on the precious metals front, the Commerzbank team said a G-7 ban on Russian gold imports would be largely symbolic, since Russian gold has already been barred from the London trading hub by the London Bullion Market Association.
In terms of an impact on global gold prices, “that’s going to be negligible,” said Fawad Razaqzada, market analyst at City Index and FOREX.com.
“There are plenty of countries that could step in to meet any shortfall in physical gold supply,” he said in emailed commentary. “In fact, the industry has already taken steps to restrict Russian gold imports, making the G7 announcement just a formality.”
Still, according to data from the World Gold Council, Russia was one of the world’s leading gold producers last year, producing a total of 330 tons — the second-highest tally in the world behind China.
Gold prices on Monday traded lower in the immediate wake of data showing that orders at U.S. factories for long-lasting goods rose by a stronger-than-expected 0.7% in May.
Meanwhile, a spate of eurozone inflation data expected later in the week could weigh on the yellow metal, since hotter-than-expected inflation would increase the pressure on the European Central Bank to raise interest rates aggressively.