Gold drops in morning trading after dollar rebounds and U.S. Treasury yields strengthen after the new $1.9 trillion U.S. stimulus measure became law. The yellow metal has shown little reaction to this morning’s Producer Price Index (PPI) numbers, with gold holding the line above $1,700.
PPI rose 0.5% in February, per the Labor Department, which is in line with the economic forecasts. Wholesale inflation had jumped 1.3% in January, the biggest gain since 2009.
President Joe Biden signed the stimulus bill Thursday and said in an address to the nation Thursday evening that he was expediting vaccinations and would try to return the country to normal after the pandemic by the July 4 holiday. Higher Treasury yields and a stronger dollar increase the opportunity cost of holding bullion and pressure gold.
Friday’s tumble in April gold futures erased gains in the first four days of the week. Gold rose 80 cents Thursday to settle at $1,722.60 an ounce on Comex. It gained 1.4% in the first four days of the week. Gold is down 0.4% so far this month, through Thursday, after posting its worst month since 2016 in February. Gold climbed $372 — or 24% — in 2020 because of uncertainty about the economy and the pandemic. Currently, the April contract is down $21 an ounce to $1,703.90 and the DG spot price is $1,702.90.
In addition to the U.S. stimulus measure — designed as a shot in the arm to the U.S. economy and labor force, which are still reeling from the coronavirus pandemic — the European Central Bank said Thursday that it would leave its Pandemic Emergency Purchase program in place without making changes until it’s set to expire in March 2022.
The bank’s statement that it would ramp up bond purchases to rein in Treasury yields was largely disregarded by investors.
A monetary policy meeting by the U.S. Federal Reserve next week will give investors further direction on the economy one year after the pandemic began. U.S. weekly initial jobless claims figures released Thursday dropped to 712,000, near a pandemic low.
The COVID-19 virus has killed more than 2.63 million people worldwide and sickened almost 118.7 million. About 25% of the cases — and 20% of the deaths — are in the U.S. The country has almost 29.3 million cases, more than any other nation.
May silver futures increased 0.2% Thursday to settle at $26.19 an ounce on Comex and was up 3.6% in the first four days of the week. The metal decreased 1.8% in February, its first retreat in three months. Silver gained 1.9% in January and 47% in 2020. The May contract is down $0.663 an ounce to $25.530 and the DG spot price is currently $25.48.
Spot platinum gained 0.1% Thursday to $1,208.60 an ounce and is up 6.3% in the first four days of this week. The metal rallied 11% in February amid forecasts for higher demand and tighter supplies. The autocatalyst metal advanced 0.5% in January and 11% in 2020. Currently, the DG spot price is off $20 an ounce to $1,181.60.
Spot palladium increased 2% Thursday to $2,374.00 an ounce and is up 0.8% so far this week. It gained 4.9% in February after plummeting 9% in January and rallying 26% in 2020. The DG palladium spot price is up over $5 an ounce to $2,375.00.
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