Gold Gains on Weaker Dollar

Gold Gains on Weaker Dollar

Gold gains Monday morning on weaker dollar and disappointing manufacturing data out of New York state, recovering ground lost at the end of last week to profit taking and rising bond yields.

In August, manufacturing in New York State grew much slower than projected with more factories reporting declining orders due to the continued impact of the coronavirus. This morning’s Empire State manufacturing index from the Federal Reserve Bank of New York dropped to 3.7 from a reading of 17.2 a month earlier, which was the strongest since November 2018. Bloomberg’s survey of economists called for the overall gauge to ease to 15.

Gold futures slid 3.9% last week to settle at $1,949.80 on Comex after falling 1.1% Friday. The December contract closed at a high of $2,069.40 on Aug. 6. Holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, slid 0.3% Friday to 1,248.29 metric tons, Reuters reported. At the time of this report, the December contract is up to $1,973.60, while DG spot is $1,970.30.

Silver futures decreased 4.7% last week to $26.26 an ounce on Comex. The December contract tumbled 6% Friday. The most active contract soared 30% in July. Currently, the December contract is up to $27.575, while DG spot is $27.40.

Gold has climbed this year because of uncertainty triggered by the coronavirus pandemic and its effects on the global economy. A dispute between the U.S. and China has also supported the precious metal.

Billionaire investor Warren Buffett’s Berkshire Hathaway conglomerate built up a new position in miner Barrick Gold during the second quarter, amid the uncertainty, while at the same time divesting shares in large U.S. banks, according to a filing with the Securities & Exchange Commission late Friday.

The virus known as COVID-19 has killed more than 774,000 people worldwide and sickened 21.6 million. About 25% of the cases — and 22% of the deaths — are in the U.S. The country has 5.4 million cases, more than any other nation.

China and the U.S. postponed a review of their Phase 1 trade deal, which was originally scheduled for Saturday, Reuters reported, citing people familiar with the discussions. No new date has been set.

Investors are awaiting the release Wednesday of the minutes from the last meeting by Federal Reserve policy makers for indications on whether more stimulus measures will be forthcoming. Central bank stimulus is typically bullish for precious metals. The U.S. presidential-election cycle will also kick into high gear this week with former Vice President Joe Biden set to officially receive the Democratic nomination at the party’s convention. Republicans will officially nominate President Donald Trump for re-election at their convention next week.

Spot palladium decreased 1.8% last week to $2,118.30 an ounce after falling 3.6% Friday. Spot platinum retreated 0.9% last week to $951.60 an ounce after tumbling 2.5% Friday. Currently, the DG spot price for platinum is up to $965.00, while palladium is up to $2,188.90.


Disclaimer: This editorial has been prepared by Dillon Gage Metals for information and thought-provoking purposes only and does not purport to predict or forecast actual results. This editorial opinion is not to be construed as investment advice or as a recommendation regarding any particular security, commodity or course of action. Opinions expressed herein cannot be attributable to Dillon Gage. Reasonable people may disagree about the events discussed or opinions expressed herein. In the event any of the assumptions used herein do not come to fruition, results are likely to vary substantially. It is not a solicitation or advice to make any exchange in commodities, securities or other financial instruments. No part of this editorial may be reproduced in any manner, in whole or in part, without the prior written permission of Dillon Gage Metals. Dillon Gage Metals shall not have any liability for any damages of any kind whatsoever relating to this editorial. You should consult your advisers with respect to these areas. By posting this editorial, you acknowledge, understand and accept this disclaimer.