Gold Eases on Stronger Dollar

Gold Eases on Stronger Dollar

Gold eases on stronger dollar this morning as optimism over a potential COVID-19 vaccine boosts the market, but the yellow metal is still being supported by the belief that monetary support to resuscitate the economy is still possible.

Gold has been on a rollercoaster-ride in the first two days of the week after tumbling almost $100 on Monday as the broader market surged on hope of a new vaccine to protect against COVID-19. The news made gold less attractive as an alternative investment. But gold prices rebounded Tuesday as the broader market fell. Currently, though, the December contract is back down to $1,860.90 an ounce and the DG spot price is $1,862.90.

Gold futures rose 1.2% Tuesday to settle at $1,876.40 an ounce on Comex. The December contract fell 3.9% in the first two days of the week. Gold is up more than $300 — or 23% — so far this year as investors have flocked to gold because of uncertainty from the coronavirus pandemic and the economy. It slipped 0.8% in October, its third consecutive monthly decline.

The economy is closely tied to the pandemic, and Federal Reserve policymakers said Monday that the surge in cases in the U.S. is likely to slow the country’s growth in the coming months. They said more government aid — which would be bullish for gold — is necessary.

The Fed’s biannual Financial Stability report on Monday indicated that asset prices in key markets are likely to plunge if the pandemic and its accompanying economic impact worsen, according to Bloomberg.

The virus known as COVID-19 has killed 1.27 million people worldwide and sickened 51.4 million. Almost 20% of the cases — and 19% of the deaths — are in the U.S. The country has 10.2 million cases, more than any other nation.

Pandemic-related lockdowns have sent millions of Americans into unemployment. Investors will look to the initial jobless claims report Thursday for additional indicators. October consumer price index data comes out Friday, with the producer price index and consumer sentiment index Friday.

Fed Chairman Jerome Powell, European Central Bank President Christine Lagarde and Bank of England Governor Andrew Bailey are among speakers Thursday at a virtual event by the ECB titled “Central Banks in a Shifting World.” Investors are likely to listen for any indications on monetary policy and the state of the global economy.

Silver futures rose 3.2% Tuesday to settle at $24.46 an ounce on Comex. The December contract plummeted 4.7% in the first two days of the week. The most active contract increased 0.6% in October. Currently, the December contract is $23.940 an ounce and the DG spot price is $23.99.

Spot palladium decreased 1.3% Tuesday to $2,477.20 and was down 1.3% so far this week. It dropped 4.5% in October. Spot platinum advanced 2.1% Tuesday $899.90 an ounce. It decreased 1.1% so far this week and fell 6% in October. The DG spot price for platinum is currently $875.30 an ounce and palladium is $2,364.40.


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