Gold prices on Monday, March 13, recovered for the first advance in nine straight sessions of losses, underpinned by uncertainty surrounding elections in the Netherlands, after strong expectations for a Federal Reserve interest-rate hike on Wednesday clobbered precious metals.
Gold for April delivery GCJ7, +0.15% rose $3.40, or nearly 0.3%, to $1,207.90. The contract settled at $1,201.40 an ounce Friday—the lowest finish since Jan. 30. The metal’s nine-session slide has marked the longest streak of declines since July 2015, FactSet data showed.
Still, gold’s ability to hold ground late last week above the key $1,200-an-ounce level helped set up a possible short-term rebound for the yellow metal on Monday. The prospect of higher interest rates, with the Federal Reserve’s looming decision March 15, can boost the allure of holding the dollar and erode demand for dollar-priced commodities like gold.
The Fed-funds futures market is currently pricing in a nearly 90% chance that the Fed will raise interest rates at the conclusion of its two-day meeting Wednesday, according to CME’s FedWatch Tool.
The ICE U.S. Dollar Index DXY, +0.00% slipped 0.1% Monday.
Global investors also were focused on Wednesday’s Dutch parliamentary elections. The risk of a “euro-skeptic” party emerging there is small, but a notable election performance could renew market concerns about the popularity of the anti-euro, far-right party in French presidential elections in April and May. Amid this uncertainty, investors may prefer increased holdings in gold, which is considered a haven asset in times of uncertainty.
In other trading, May silver SIK7, +0.34% rose 19 cents, or 1.1%, to $17.12 an ounce. It shed 4.6% last week.
The SPDR Gold Trust ETF GLD, -0.10% was flat in premarket, while the gold–miner focused VanEck Vectors Gold Miners ETF GDX, +0.67% was up 0.6%. The iShares Silver Trust SLV, -0.43% was off 0.1%.