Gold futures tumble to two-month lows on strong dollar, rate hike worries

Gold prices falling in a bearish market. Red arrow going down over gold bullion bars. Concept digital 3D render.

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Gold futures fell Monday to their lowest finish since late February, hurt by the prospect of aggressive policy tightening by the Federal Reserve and a stronger dollar.

"Fears about rate hikes have gotten the upper hand as of late," Julius Baer analyst Carsten Menke told Reuters, adding that gold has become "rather expensive as a safe haven asset.

June Comex gold (XAUUSD:CUR) closed -2% to $1,896/oz, the lowest finish for a most-active contract since February 25, while May silver (XAGUSD:CUR) ended -2.4% to $23.67/oz, its lowest settlement since February 16.

ETFs: (NYSEARCA:GLD), (NYSEARCA:GDX), (IAU), (NUGT), (PHYS), (SGOL), (SLV), (SIVR), (PSLV)

"In the depths of a true equity bear market, and now a broadening China lockdown also spreading, gold has not maintained safe-haven interest," Wolfpack capital's Jeff Wright told MarketWatch, noting gold is a non-interest bearing vehicle in an environment of rising U.S. Treasury yields.

"Gold's inability to benefit from falling stock markets is a reflection of how difficult it will be for gold to make significant gains given the interest rate outlook outlined by the Federal Reserve last week," according to Kinesis Money's Rupert Rowling.

Separately, Newmont (NEM) and Barrick Gold (GOLD) are -2.1% and -3.7%, respectively, as Bernstein analysts downgraded the stocks to Market Perform from Buy, "given the equity leverage to gold price which is at levels we don't believe can be sustained."

Other precious metals movers include (EXK) -7.4%, (CDE) -7%, (GORO) -6.9%, (SVM) -6.4%, (HL) -5.9%, (AUY) -5.2%, (IAG) -4.8%, (AG) -4.5%, (AGI) -4.2%, (FSM) -4.1%, (PAAS) -3.8%, (AEM) -3.2%, (GFI) -3.2%, (AU) -3.1%, (KGC) -3.1%.

Palladium settled -10.7% Monday at $2,122.10/oz after plunging as much as 13% intraday.

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