Gold fell early Monday on vaccine optimism which propelled investors into equities at the expense of gold. The yellow metal’s price fell despite the dollar hitting its lowest level in two and a half years. The Dow fell 250 after this morning’s opening bell, but is still set for its best month since 1987.
This morning, Moderna announced it will request emergency clearance from the FDA for its coronavirus vaccine after new data confirms the vaccine is more than 94% effective in preventing Covid-19 and was safe. Meanwhile, Charter flights bringing Pfizer’s new COVID-19 vaccine to the U.S. from Belgium began Friday, though the drug hasn’t yet been approved by the U.S. Food and Drug Administration. The agency is expected to authorize the vaccine by mid-December. The broader market also got a boost Monday from Chinese manufacturing data showing the factory index climbed to a three-year high in November.
Front-month gold futures dropped 4.8% last week to settle at $1,788.10 an ounce on Comex, the lowest settlement since July 1. The February contract retreated 1.3% Friday. Markets were closed Thursday for the U.S. Thanksgiving Day holiday. Currently, the February contract is $1,775.20 an ounce, while the DG spot price is $1,773.50.
Even though gold is down 4.9% so far this month, the bullion is up $265 — or 17% — so far this year as investors have flocked to gold because of uncertainty from the coronavirus pandemic and the economy.
The declines in gold were capped by a retreat in the dollar, which fell to the lowest level in more than two years. A weaker dollar is usually bullish for gold. The yellow metal is also typically a hedge against inflation, which is a risk given the huge amounts of stimulus being poured into the global economy by central banks around the world.
Investors will be awaiting Federal Reserve Chairman Jerome Powell’s testimony before Congress on Tuesday and Wednesday for more clues about additional stimulus after pandemic-related lockdowns have sent millions of Americans into unemployment and curbed economic growth. Powell and the Fed have been at odds with the outgoing Trump administration over additional aid.
Key first-of-the month economic data this week will also give guidance to investors. The monthly U.S. manufacturing report for November will come out Tuesday, with the U.S. monthly employment report due out Friday.
China’s manufacturing purchasing managers’ index rose to 52.1 in November from 51.4 in October, according to data released Monday by the National Bureau of Statistics. The figure beat analysts’ expectations and was the highest since September 2017.
The COVID-19 virus has killed 1.46 million people worldwide and sickened 62.7 million. About 21% of the cases — and 18% of the deaths — are in the U.S. The country has almost 13.4 million cases, more than any other nation.
Front-month silver futures fell 7.6% last week to settle at $22.64 an ounce on Comex. The March contract decreased 3.4% Friday. The most active contract is down 4.3% in November after gaining 0.6% in October. Currently, the March contract is $22.260 an ounce and the DG spot price is $22.24.
Looking at the platinum group metals, spot platinum climbed 1.3% last week to $971.30 an ounce. It rose 0.3% in the Friday and has advanced 14% this month after losing 6% in October. Spot palladium rose 4% last week to $2,428.60 an ounce and gained 3% Friday. It’s up 9.4% in November after advancing 4.5% in October. The current DG spot price for platinum is up to 978.10 an ounce, while palladium has slipped to $2,409.00.
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