Gold Back Over $1,900

Gold Back Over $1,900

Gold back over $1,900 this morning on concerns over the global economy and questions about the U.S. presidential election. Gold showed little reaction to this morning’s Producer Price Index (PPI) numbers.

The U.S. PPI rose to 0.4% in September from 0.3% in August according to the U.S. Labor Dept. On a yearly basis, the PPI rose to 0.4% from -0.2%, beating market expectation of 0.2%.

The stalled Covid vaccine trials also helped put a floor under prices, making gold a more attractive hedge investment.

Gold futures fell 1.8% Tuesday to settle at $1,894.60 an ounce on Comex. The December contract dropped 1.6% in the first two days of the week. The yellow metal is up almost $400 — or 24% — so far this year as investors have flocked to gold because of uncertainty from the coronavirus pandemic and the economy. Currently, the December contract is up to $1,911.60, while the DG spot price is $1,906.50.

House Speaker Nancy Pelosi said the latest White House proposal “falls significantly short” of the stimulus package that’s needed to address the coronavirus crisis. But Senate Majority Leader Mitch McConnell plans a vote on limited legislation the White House has advocated. Stimulus packages are typically bullish for gold.

Meanwhile, the International Monetary Fund cut its global economic forecasts for 2021 and warned of a “long, uneven” recovery. The global economy is likely to shrink by 4.4% this year, less than was forecast in June, but only grow by 5.2% next year, compared with 5.4% forecast in its previous report.

The virus known as COVID-19 has killed 1.09 million people worldwide and sickened 38.1 million. About 21% of the cases — and 20% of the deaths — are in the U.S. The country has 7.86 million cases, more than any other nation.

Johnson & Johnson paused its clinical study into a vaccine, the company said Monday, while Eli Lilly paused an antibody trial on Tuesday.

Pandemic-related lockdowns have sent millions of Americans into unemployment. Weekly initial jobless claims data on Thursday and retail sales and industrial production data for September on Friday will give investors a better picture on the state of the economy.

Silver futures decreased 4.5% Tuesday to settle at $24.13 an ounce on Comex. The December contract lost 3.9% in the first two days of the week. The most active contract plunged 18% in September after gaining 18% in August and soaring 30% in July. The December contract is currently up at $24.565, while the DG spot price is $24.41.

Spot palladium declined 4.1% Tuesday to $2,319.20 an ounce and fell 6.1% in the first two days of the week. Spot platinum slipped 0.7% Tuesday to $873.60 an ounce and retreated 2.3% so far this week. The DG spot price for palladium is currently at $2,358.90, while platinum is $863.80.


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