Gold eyes second straight up week as the dollar weakens on the Federal Reserve downplaying inflation fears and signaling that it will keep interest rates low for the time being. The yellow metal is also supported by weak U.S. retail sales figures.
Comments by Fed Governor Christopher Waller suggested that the central bank is in no hurry to boost interest rates, even after the release of high inflation numbers and a week monthly jobs report for April. Gold is a traditional hedge against inflation.
This morning, the Commerce Department reported unchanged retail sales for April as the energy from stimulus checks fades. The flat month surprised analysts as it follows a 10.7% surge in March — an upward revision from the previously reported 9.7% increase. U.S. retail sales unexpectedly stalled in April as the boost from stimulus checks faded. This
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Front-month gold futures dropped 0.4% in the first four days of the week to settle at $1,824.00 an ounce Thursday on Comex. The June contract advanced $1.20 on Thursday. Futures rose 3% in April after dropping in January, February and March. Gold climbed $372 — or 24% — in 2020 because of uncertainty about the economy and the pandemic. Currently, the June contract is up $15.00 an ounce to $1,839.70 and the DG spot price is $1,839.50.
Inflation rose to the highest level in nearly 13 years in April, while the April jobs report showed that the unemployment rate rose to 6.1%, triggering some calls for the Fed to pay more attention to inflationary risks, an expected side effect to the stimulus money being poured into the recovery.
“Now is the time we need to be patient, steely-eyed central bankers, and not be head-faked by temporary data surprises,” Waller said Thursday. He noted that “the factors putting upward pressure on inflation are temporary, and an accommodative monetary policy continues to have an important role to play in supporting the recovery.”
The weekly initial jobless claims report for last week, which came out Thursday, showed a rosier picture: New applications for unemployment benefits reached a pandemic-era low as Americans return to work after the worst of the pandemic.
The COVID-19 virus has killed more than 3.34 million people worldwide and sickened more than 161.1 million. About 20% of the cases — and 17% of the deaths — are in the U.S. The country has almost 32.9 million cases, more than any other nation, though its proportion of both new cases and deaths has been declining as the vaccination effort becomes more widespread and other parts of the world such as India have outbreaks.
Front-month silver futures fell 0.7% Thursday to settle at $27.06 an ounce on Comex. The July contract retreated 1.5% in the first four days of the week. Silver rose 5.5% in April after dropping in February and March. It increased 47% in 2020. The July contract is up $0.506 an ounce to $27.565 and the DG spot price is $27.41.
Spot palladium lost 1% Thursday to $2,860.00 an ounce and is down 2.9% so far this week. The metal jumped 12% last month amid strong industrial demand and an on-going supply shortage. Palladium also rose in February and March. It rallied 26% in 2020. Currently, the DG spot price is up $25.40 an ounce to $2,906.00.
Spot platinum fell 1.2% Thursday to $1,210.60 an ounce and dropped 3.8% in the first four days of the week. Platinum increased 0.8% in April after trading flat in March. The autocatalyst metal rose 11% in 2020.
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