Gold looked to shore up losses Monday afternoon amid recession fears that touched off a global sell-off as investors remained hopeful that the correction would be temporary.
The yellow metal, which shed more than 2% at one point, regained some ground late Monday afternoon, trading down $34.91 to $2,406 per ounce – a loss of 1.4%. Other precious metals affected by the fallout continued to struggle, however. Silver was down more than 4.5% approaching market close at $27.22 per ounce. Platinum was down 4.3% and palladium lost 4.4%.
The market collapse ignited Friday with a surprise jobs report that saw the unemployment rate rise to 4.3%, triggering the Sahm Rule, which is designed to signal the beginning of a recession.
The spillover on Monday caused a plunge in The Dow Jones Industrial Average by more than 1,000 points and saw the S&P 500 post its worst day since 2022 with a 3% loss.
Meanwhile, investors continued to believe that Monday’s massive correction would be a temporary one for gold, especially due to its safe-haven appeal in choppy economic and geopolitical periods and expectations that the Fed will soon move to cut interest rates. The market currently expects policymakers to make a cut of at least 50 basis points when they meet in September.
“Elevated geopolitical tensions and recent hopes for even greater Fed rate cuts should create supportive conditions for bullion,” Exinity Group chief market analyst Han Tan told Reuters on Monday. “Ultimately, gold should be able to post a new record high once nerves settle.”
More articles from Justin Juozapavicius
