Gold prices experienced a slight pullback on Monday as investors locked in some profits after a strong first quarter. Bullion prices surged over 7% in the first three months of the year, with the majority of gains coming in March due to fears of a U.S. banking crisis.
Although government intervention has calmed these concerns, gold remains relatively underpinned by safe-haven demand.
Investors will be turning their attention to a series of U.S. economic readings this week for more cues on monetary policy. Manufacturing activity data for March is expected to show that the U.S. manufacturing sector remained in contraction territory for a fifth straight month.
The main point of focus this week will be nonfarm payroll data for March, due on Thursday. Traders will be watching for any signs of weakness in the labor market, which could open the path for a less hawkish Federal Reserve this year.
A less hawkish Federal Reserve bodes well for gold, which has largely overtaken the dollar as a preferred safe haven over the past month. This has been driven in part by expectations that the Fed will taper its hawkish stance to avoid further pressure on the banking system.
In addition to gold, platinum futures sank 0.5%, while silver futures fell nearly 1%. This was likely due to the strength of the dollar, which recovered from steep losses in March, as well as some strength in Treasury yields.
Among industrial metals, copper prices fell on more signs of weakening manufacturing activity in major importer China. A private survey showed that manufacturing growth in China slowed sharply in March, which could dent its appetite for commodities and point to an uneven economic recovery in the country. Copper futures fell 0.4% to $4.0663 a pound.
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