Gold dips overnight as dollar gains with the dollar index up 0.2% against its rivals. The yellow metal is back above $1,800, nearing its three-week high, as ongoing concerns about COVID-19 and inflation keep lending support.
Investors are awaiting Federal Reserve Chairman Jerome Powell’s upcoming testimony before Congress this Wednesday and Thursday on the state of the economy and the release of key U.S. inflation data for further direction.
August gold futures rose 1.5% last week to settle at $1,810.60 an ounce on Comex after front-month futures rallied 0.6% Friday. Gold has increased 2.2% so far in July. It fell 7% in June in the worst month since November 2016 after advancing 7.8% in May, the best month for the precious metal since July 2020. Gold climbed $372 — or 24% — in 2020 because of uncertainty about the economy and the pandemic and is down 4.5% so far in 2021. Currently, the August contract is down $6.80 (-0.38%) an ounce to $1,803.80 and the DG spot price is $1,804.30.
Speculators raised their net long positions in Comex gold and silver in the week ended July 6, according to the weekly Commitments of Traders report from the U.S. Commodity Futures Trading Commission, released Friday.
Physical demand for gold in India and other hubs weakened last week as prices rose, Reuters reported.
Meanwhile, the rapid spread of the delta variant of the coronavirus indicates has increased speculation that pandemic isn’t over yet has made gold more attractive as a hedge against uncertainty.
The U.S. consumer price index data for June is set for release Tuesday and is likely to give investors a clearer understanding of whether central bank stimulus measures have led inflation to dangerous levels and might require policymakers to scale back their loose monetary policy. Gold is a traditional hedge against inflation.
Investors will also be watching for indications on the state of the labor market. U.S. weekly initial jobless claims unexpectedly increased in data released last week, signaling that growth in the job market may be slowing. New applications for unemployment benefits fell to a pandemic-era low in the prior week’s data.
But the Standard & Poor’s 500 Index rose to a record high Friday, indicating that investors are still confident about the economic outlook.
September silver futures retreated 1% last week to settle at $26.23 an ounce on Comex. The front-month contract gained 1% Friday and is up 0.2% so far this month. Silver fell 6.5% in June after rallying 8.3% in May. The metal rose 47% in 2020 and is down 0.7% so far this year. The September contract is currently down $0.094 (-0.36%) an ounce to $26.140 and the DG spot price is $26.15.
Spot palladium increased 1.1% last week to $2,825.50 an ounce. It rose $2 Friday and is up 1.2% so far this month. It retreated 1.8% in June after losing 4.1% in May. It’s up 15% so far in 2021. Currently, the DG spot price is up $1.00 an ounce to $2,825.00.
Spot platinum advanced 1.1% last week to $1,107.60 an ounce. It rallied 2.2% Friday and is up 2.5% in July. It dropped 9% in June after losing 1.5% in May. The autocatalyst metal is up 3.2% in 2021. The DG spot price is currently up $8.00 an ounce to $1,116.70.
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