Gold Fighting Stronger Dollar

Gold Fighting Stronger Dollar

Gold fighting stronger dollar Monday morning hanging a bit lower as the market reacts to fears of a repeat of the first European lockdown in the months ahead and the lack of progress in U.S. stimulus talks.

The yellow metal was rangebound last week — slipping just $1.20 an ounce — amid swinging sentiment on the stimulus legislation. Stimulus packages are typically bullish for gold. Uncertainty over the economy and the upcoming U.S. presidential election have put a floor under prices, making gold a more attractive hedge investment.

Gold futures settled at $1,905.20 an ounce on Comex Friday after the December contract rose 60 cents. The yellow metal is up almost $400 — or 25% — so far this year as investors have flocked to gold because of uncertainty from the coronavirus pandemic and the economy. The December contract is currently down less than a dollar an ounce to $1,904.30, while the DG spot price is $1,903.40.

Holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, fell 0.14% Friday to 1,263.80 metric tons, Reuters reported. And speculators increased their net long positions on Comex gold contracts in the week ended Oct. 20, according to the weekly Commitments of Traders report released Friday by the U.S. Commodity Futures Trading Commission.

Gold premiums in India climbed to their highest level in three months last week as jewelers stocked up on the precious metal ahead of the holidays of Dussehra, Diwali and Dhanteras, Reuters reported.

Investors will be closely watching the stimulus standoff and the final week of the U.S. presidential election campaign this week as well as central bank statements from around the world. The Bank of Canada will announce a rate decision and offer guidance Wednesday, followed by the Bank of Japan and European Central Bank on Thursday.

Economic indicators to watch for include U.S. third-quarter U.S. GDP and initial jobless claims on Thursday. Pandemic-related lockdowns have sent millions of Americans into unemployment.

The virus known as COVID-19 has killed more than 1.15 million people worldwide and sickened 42.9 million. About 20% of the cases — and 20% of the deaths — are in the U.S. The country has 8.6 million cases, more than any other nation.

Silver futures increased 1.1% last week to settle at $24.68 an ounce on Comex. The December contract fell 3.4 cents Friday. The most active contract is up 5% this month after plunging 18% in September, gaining 18% in August and soaring 30% in July. Currently, the December contract is down to $24.34 an ounce, while the DG spot price is $24.30.

Spot palladium rose 2.5% last week to $2,399.80 an ounce after gaining 0.1% Friday. Spot platinum advanced 4.6% last week to $911.40 an ounce after rallying 2.2% Friday. The DG spot price for platinum is currently $881.50 an ounce and palladium is $2,384.00.


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