Gold advances early Monday on weak dollar which traded near the lowest level in two years as U.S. coronavirus cases topped 6 million. But equities advanced, making other assets attractive and putting a lid on the yellow metal’s rally. In fact, in early-morning trading, gold dipped near $20 an ounce, which it has since reclaimed.
A weaker dollar is typically bullish for gold, and investors have flocked to the metal as a hedge against uncertainty as the coronavirus pandemic has worsened and the economy has stalled. But the Standard & Poor’s 500 Index has risen to new records for the past six consecutive sessions, putting riskier assets in play, as Wall Street wraps its best August in more than three decades.
Investors are awaiting direction from key first-of-the-month manufacturing data from the U.S. and other Western economies on Tuesday. Chinese manufacturing expanded in August, but figures released Monday from the National Bureau of Statistics came in below expectations.
Gold futures rose 1.4% last week to settle at $1,974.90 an ounce on Comex. The December contract increased 2.2% Friday. Futures are down 0.6% this month, through Friday. If futures end August lower, it will be the first monthly decline since March. The most-active contract closed at a high of $2,069.40 on Aug. 6, and the yellow metal is up more than $460 — or 30% — so far this year. Currently, the December contract is at $1,977.70 and the DG spot price is $1,969.50.
Silver futures rallied 3.4% last week to settle at $27.79 an ounce on Comex. The December contract advanced 2.2% Friday. The most active contract has gained 15% so far this month after soaring 30% in July. At the time of this posting, the December contract is up to $28.240 and the DG spot price is $28.08.
Comments from Federal Reserve Chairman Jerome Powell on Thursday that the central bank’s monetary policy would remain accommodative gave metals a boost last week, as stimulus measures are typically bullish for gold.
The key U.S. monthly job numbers for August will come out Friday, with the weekly numbers for last week out on Thursday. U.S. applications for unemployment benefits topped 1 million for the 22nd time in 23 weeks, amid the economic impact of the coronavirus pandemic and associated lockdowns, according to the weekly U.S. initial jobless claims report released last week by the Labor Department.
The virus known as COVID-19 has killed more than 845,000 people worldwide and sickened 25.1 million. About 24% of the cases — and 22% of the deaths — are in the U.S. The country has more cases than any other nation.
Dr. Stephen M. Hahn, the commissioner of the U.S. Food and Drug Administration, said in an interview published in The Financial Times on Sunday that the agency would be willing to approve a coronavirus vaccine before Phase 3 clinical trials are complete if it’s “appropriate.”
Spot palladium increased 2.2% last week to $2,236.00 an ounce and also gained 2.2% Friday. It’s up 5.4% this month. Spot platinum rallied 1.5% last week to $940.20 an ounce and advanced 1% Friday. It’s up 3.6% so far this month. Currently, the DG spot price for palladium is $2,244.70, while platinum is $937.40.
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