Gold Fell As Dollar, Equities Strengthened

Gold Fell As Dollar, Equities Strengthened

Gold fell early Wednesday as the dollar edged higher and equities strengthened as investors turned to them and other riskier assets. Meanwhile, the markets seek cues on the future of monetary tapering ahead of the U.S. Federal Reserve’s symposium this week.

The yellow metal neared $1,800 an ounce after the release of the U.S. durable goods data this morning, but then slipped back to hover just over $1,790. July orders for long-lasting goods dropped 0.1%, that’s only second time it fell in 15 months. The good news is that the slump is mainly in new airplanes. Demand was strong in other parts of the economy despite broad shortages of labor and materials. Economists polled by the Wall Street Journal had forecast a 0.5% decline.

The Standard & Poor’s 500 Index and Nasdaq Composite Index closed at a record highs Tuesday. Investors awaited any signals on the Federal Reserve’s plans to taper coronavirus stimulus measures expected at the central bank’s annual gathering in Jackson Hole, Wyoming, which is being held virtually this year. The event starts Thursday.

December gold futures rose 0.1% Tuesday to settle at $1,808.50 an ounce on Comex. The precious metal advanced 1.4% in the first two days of the week. Gold is down 0.5% so far this month after increasing for the third time in four months in July. The yellow metal climbed $372 – or 24% – in 2020 because of uncertainty about the economy and the pandemic and is down 4.6% so far in 2021. The December contract is currently down $14.90 (-0.82%) an ounce to $1,793.60 and the DG spot price is $1,789.00.

Holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, fell 0.2% Tuesday to 1,004.63 metric tons, Reuters reported.

Some of the bounce in broad-market investor sentiment this week came after Dr. Anthony Fauci, the White House’s coronavirus adviser, said that the United States could gain control over the pandemic as soon as this spring if the vast majority of those eligible get vaccinated.

Gold has been underpinned in recent weeks by the uncertainty around the spread of the delta variant of the coronavirus and its likely impact on the economy. Fed policymakers have indicated that they will be watching the progress of the pandemic closely to determine whether to ramp up their timeline to withdraw stimulus efforts.

In other economic news, investors will be watching for data on U.S. GDP and weekly initial jobless claims Thursday and July personal income and spending data Friday. The personal consumption expenditures price index will also likely be closely monitored as an inflation measure closely watched by Fed policymakers.

December silver futures rose 1% Tuesday to settle at $23.94 an ounce on Comex. The front-month contract increased 3.4% in the first two days of the week. Silver has lost 6.3% so far this month after dropping 2.5% in July. The metal rose 47% in 2020 and is down 9.4% so far this year. Silver prices are tied to industrial demand, which could taper if lockdowns are reinstated and dampen manufacturing. The December contract is currently down $0.097 (-0.41%) an ounce to $23.840 and the DG spot price is $23.81.

Spot palladium rallied 2.4% Tuesday to $2,472.00 an ounce and is up 8.2% so far this week. It’s down 7.6% in August and up 0.9% so far in 2021. Currently, the DG spot price is up $14.50 an ounce to $2,477.00.

Spot platinum retreated 0.5% Tuesday to $1,020.40 an ounce, though it’s up 1.7% so far this week. The metal has decreased 3.5% in August and is down 5% in 2021. The DG spot price is currently down $15.90 an ounce to $1,004.20.


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