By Barani Krishnan
Investing.com - The U.S. economy is messing things up for gold longs, even as the Fed might come through for them. Palladium, meanwhile, is falling out of bed.
After showing promise in the previous session that a return to $1,300-an-ounce pricing may be possible, both gold futures and bullion fell by about half a percent each on Monday as data showing 9-1/2 year highs in April's U.S. consumer spending boosted risk in equity markets and lowered appetite for safe havens like gold.
Spot gold, reflective of trades in bullion, was down $6.54, or 0.5%, at $1,279.47 per ounce by 2:10 PM ET (18:10 GMT).
Gold futures for June delivery, traded on the Comex division of the New York Mercantile Exchange, settled the official session down $7.30, or 0.6%, at $1,281.50 per ounce.
Just on Friday, bullion and Comex gold rose about half percent each, despite a stronger quarterly reading for the U.S. gross domestic product that should have rightly sparked a dollar-equities rally. Some analysts, however, said the GDP data raised questions about the actual economic strength of the United States, since the growth figures were largely driven by temporary factors like a smaller trade deficit and the largest accumulation of unsold merchandise since 2015.
And while gold traders largely held out the belief that the yellow metal had \a chance to advance in the next two sessions leading to the Federal Reserve's widely-anticipated stay on interest rates, some also braced for the possibility of more U.S. economic outperformance in a data-heavy week.
Aside from Wednesday's Fed decision, the market is on the lookout for data on Chinese manufacturing & non-manufacturing PMIs on Tuesday, U.S. factory orders numbers on Thursday and monthly U.S. jobs figures on Friday.
"Traders are also keenly eyeing China-U.S. trade talks and other negotiations with Japan and the Eurozone to see if there'll be any surprises there," said George Gero, precious metals analyst at RBC Wealth Management in New York. "And so, caution is the key word for traders pulling back on metals bids."
Palladium tumbled almost 7%, hurtling sharply below the key $1,400 perch while retaining its mantle as the world's priciest traded metal. The fall trimmed the June contract's gain for the month from 7.86% to 1.5%.
Spot palladium was down $100.20, or 6.9%, at $1,356.65 an ounce by 2:10 PM ET (18:10 GMT). The silvery-white auto-catalyst metal, used for purifying gasoline emissions, traded some $300 above gold in early March before cutting that premium to about $100 or less lately.
Trades in other Comex metals as of 2:10 PM ET (18:10 GMT):
Palladium futures down $90.55, or 6.3%, at $1,356.65 per ounce.
Platinum futures down $5.35, or 0.6%, at $898.25 per ounce.
Silver futures down 15 cents, or 1%, at $14.94 per ounce.
Copper futures flat at $2.90 per pound.