Gold prices are plummeting, joining the broader market meltdown on growing recession fears.
August gold futures plummeted more than 2 percent to around $1,765 per ounce on the COMEX division of the New York Mercantile Exchange. This is the lowest level since December 2021.
The yellow metal is down more than 3 percent over the last week, adding to its year-to-date loss of about 3.5 percent. However, over the last 12 months, gold prices have held steady, sliding just 1.2 percent.
But the entire metals market is bleeding red ink on the first day back from the Fourth of July holiday.
August silver futures fell nearly 3 percent to just above $19 per ounce. August copper futures added to their immense losses, with the red metal declining more than 4 percent to $3.44 per pound. August platinum futures lost 2.4 percent to $850 an ounce, while August palladium futures erased roughly 2 percent to $1,900 per ounce.
The entire financial market hemorrhaged Tuesday, from stocks to bonds to commodities. But why?
Gold Market Is Not Glittering
In recent weeks, concerns over economic growth have been the top theme in the broader financial markets, rivaling that of elevated inflation worries.
With more economists and Wall Street firms increasing the odds of an economic downturn or making a recession their baseline scenario, investors are responding by fleeing the stock markets and pouring into more conventional safe-haven assets. One of these has been the greenback.
The U.S. Dollar Index (DXY), which gauges the greenback against a basket of currencies, soared 1.45 percent to a more than 20-year high of 106.66. Year-to-date, the index has spiked more than 11 percent.
A stronger buck is typically bearish for dollar-denominated commodities because it makes it more expensive for foreign investors to purchase.
At the same time, experts purport that traders do want to hold the traditional hedge in their portfolios since it can function as a balancing tool amid growing uncertainty in the global economy and international financial markets.
By Andrew Moran
