Precious Metals Settle Lower on Dollar Strength and Hawkish Fed Comments

Precious metals fell back Monday as a stronger dollar and hawkish Fed comments sparked long liquidation pressures in precious metals. Comments from Boston Fed President Rosengren sparked long liquidation in precious metals when he said at a Boston Fed conference on Saturday that "if the economy grows at 1.7%, consumption continues to be strong, inflation is gradually going up and the unemployment rate is at 3.5%, I would not see a need for additional accommodation" at the Fed's October of December policy meetings. 

Concern that global industrial metals demand may weaken pressured silver prices after Monday's economic data showed German Aug factory orders fell -0.6% m/m, weaker than expectations of -0.3% m/m. Ongoing trade and geopolitical tensions, along with dovish central bank expectations, sparked fund buying of precious metals as long gold positions in ETFs have risen steadily over the past 4 months up to a new 6-1/2 year high last Friday and long silver positions in ETFs rose to a new record high on Sep 2.