Gold falls on Turkish concerns as the country abruptly replaced its central bank governor over the weekend. The headlines resulted in 10-year Treasury yields remaining near the highest level in more than a year.
The U.S. dollar firmed this weekend as well after Turkey’s President Erdogan swapped out the Turkish central bank head with a critic of high interest rates, which sent the lira close to its all-time low. Gold typically has an inverse relationship with the dollar and Treasurys because strength in the other assets increases the opportunity cost of holding gold.
Front-month gold futures rose 1.4% last week to settle at $1,743.90 an ounce Friday on Comex as the most-active contract rolled to June. Futures rose 0.5% Friday. Gold is up 0.9% so far this month 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 $9.90 to $1,731.80 and the DG spot price is $1,732.20.
Treasurys have been elevated because of U.S. stimulus measures designed to support the economy still reeling from the coronavirus pandemic. U.S. President Joe Biden signed a $1.9 trillion stimulus bill earlier this month.
Federal Reserve Chairman Jerome Powell told The Wall Street Journal over the weekend that the central bank will help support the economy for “as long as it takes.” Powell and Treasury Secretary Janet Yellen are expected to make their first joint appearance before a U.S. House committee Tuesday to testify about central bank and pandemic policies.
Investors will also be watching for the February report on durable goods orders on Wednesday and weekly initial jobless claims on Thursday. Core inflation for February comes out Friday.
The COVID-19 virus has killed almost 2.72 million people worldwide and sickened almost 123.2 million. About 24% of the cases — and 20% of the deaths — are in the U.S. The country has more than 29.8 million cases, more than any other nation.
May silver futures increased 1.6% last week to settle at $26.32 an ounce on Comex, though the metal slipped 0.1% Friday. Silver is down 0.5% so far this month after decreasing 1.8% in February, its first retreat in three months. It gained 1.9% in January and 47% in 2020. The May contract is currently down $0.666 to $25.655 and the DG spot price is $25.66.
Spot platinum gained 0.3% last week to $1,207.30 an ounce, though it slipped 1.5% Friday. The metal has advanced 1% in March after rallying 11% in February amid forecasts for higher demand and tighter supplies. The autocatalyst metal rose 0.5% in January and 11% in 2020. The DG spot price is currently down $26.70 to $1,179.30.
Spot palladium increased 12% last week to $2,666.50 an ounce, though it slipped 0.7% Friday. It has advanced 14% in March. It gained 4.9% in February, plummeted 9% in January and rallied 26% in 2020. Currently, the DG spot price for palladium is up $4.00 to $2,665.50.
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