Gold Challenging $1,900

Gold Challenging $1,900

Gold challenging $1,900 again as investors buy the dip that occurred overnight when the dollar steadied and stock markets rallied. Gold was on track for its highest close in seven weeks, after U.S. President Donald Trump signed a pandemic-relief bill including stimulus and the dollar fell.

The new law — which Trump had previously attacked as a “disgrace” — provides $900 billion in pandemic aid and funds the government through September, preventing a shutdown which would have occurred in less than 48 hours. Stimulus measures include extending expanded unemployment benefits and an eviction moratorium. Stimulus measures are typically seen as bullish for gold.

Trump signed the law unexpectedly Sunday after implicitly threatening in a videotaped message Tuesday to veto the measure, which passed both houses of Congress about a week ago with overwhelming bipartisan support. Trump’s Treasury Secretary Steven Mnuchin was part of the negotiations.

Front-month gold futures traded near $1,900 an ounce early Monday. They fell 0.3% last week — a shortened holiday week — to settle at $1,883.20 an ounce Thursday on Comex. The February contract rose 0.3% Thursday. Gold is up around $350 — or 24% — so far this year as investors have flocked to the metal because of uncertainty from the coronavirus pandemic and the economy. The metal is up 5.7% this month, on track for its first monthly gain since July. The February contract is currently up over $14 an ounce to $1,897.70 and the DG spot price is $1,892.70.

Gold typically rises as a hedge against inflation triggered by economic stimulus measures, which is why the package is considered bullish for gold. The metal has also gotten a boost from the uncertainty to the global economy from the coronavirus pandemic, which continues to worsen, even as early vaccination efforts have gotten underway.

The COVID-19 virus has killed almost 1.76 million people worldwide and sickened about 80.8 million. About 24% of the cases — and 19% of the deaths — are in the U.S. The country has about 19.1 million cases, more than any other nation.

Economic releases are limited this week because of the year-end holidays, and trading is expected to be light. U.S. weekly initial jobless claims are set for release on Thursday, as investors close their books for 2020. Key manufacturing data from the world’s major economies is due out at the beginning of next week.

Front-month silver futures dropped 0.5% last week to settle at $25.91 an ounce on Comex. The March contract dropped 12.5 cents Thursday. Silver is up 15% this month and 45% this year. The March contract is currently up over $0.90 an ounce to $26.870 and the DG spot price is $26.61.

Spot palladium gained 0.6% last week to $2,359.00 an ounce and decreased 0.8% Thursday. It’s down 1.9% this month and up 21% this year. The DG spot price for palladium is currently up over $120.00 an ounce to $2,479.00.

Spot platinum decreased 1.3% last week to $1,030.00 an ounce and rose 0.7% Thursday. It’s up 6.2% this month and 6.6% this year. Currently, the DG spot price for platinum up over $18.00 an ounce to $1,049.90.


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