Gold futures retreated on Thursday and headed toward their lowest settlement level for a most-active contract since March following a wave of interest-rate hikes from global central banks.
A number of interest-rate hikes from global central banks helped to weigh on gold and silver prices on Thursday following more hawkish commentary from Federal Reserve Chair Jerome Powell on Wednesday.
The Bank of England delivered a surprise 50 basis point rate hike, which was larger than economists had anticipated as the central bank struggles to tame the highest inflation in the G-7. Central banks in Switzerland and Norway also increased rates, as did Turkey's central bank, which delivered a sizable hike of its own.
"Central banks are in focus late this week and they are still leaning hawkish on their monetary policies. That is bearish for the precious metals markets, both from a demand perspective and as it makes the competing asset class of government bonds more attractive as yields are rising," said Jim Wyckoff, senior analyst at Kitco.com, in emailed commentary.
Fed Chair Powell returns to Capitol Hill for a second day of testimony on Thursday, but his comments from Wednesday, where he reiterated that the Fed expects to deliver more interest-rate hikes later this year, helped to weigh on gold.
The yellow metal has slipped since Powell's press conference last week, where he and other senior Fed officials opted to leave interest rates on hold after 10 consecutive rate increases. However, they also signaled that more hikes would likely arrive later in the year.