Gold Heading for Fourth Weekly Gain

Gold Heading for Fourth Weekly Gain

Gold was mildly down Friday morning pressured by slightly rebounding U.S. bond yields and dollar, but is still appears heading for a fourth weekly gain as investors remained confident that the U.S. Federal Reserve would maintain its easy monetary policy after Chairman Jerome Powell reiterated in congressional testimony that inflation would be temporary.

“To the extent that it’s temporary, it wouldn’t make much sense to react to it,” he said about inflation in testimony Thursday. He conceded that officials don’t know how much longer price pressures will remain high, though.

The June U.S. inflation report on Tuesday showed consumer prices jumped the most since 2008 and beat all estimates. Gold is a traditional hedge against inflation, which has propped up prices, but the precious metal has come under pressure from a stronger dollar and higher Treasury yields.

August gold futures rose 0.2% Thursday to settle at $1,829.00 an ounce on Comex. The front-month contract, which is trading near a four-week high, gained 1% in the first four days of this week. Gold has increased 3.2% so far in July. It fell 7% in June in the worst month since November 2016 after advancing 7.8% in May, the best month for the precious metal since July 2020. Gold climbed $372 — or 24% — in 2020 because of uncertainty about the economy and the pandemic and is down 3.5% so far in 2021. The August contract is down $5.20 (-0.28%) an ounce to $1,823.80 and the DG spot price is $1,826.70.

Despite Powell’s comments, many market watchers continue to speculate that the Fed will have to tighten its monetary policy, scaling back stimulus measures put in place to protect the economy during the pandemic.

U.S. weekly initial jobless claims reached a pandemic-era low last week, according to Thursday’s report from the Labor Department, signaling that the labor-market recovery may be holding. The data reassured some investors after the prior report showed an unexpected increase.

In China, a top gold consumer, data showed the economy grew a little more slowly than expected in the second quarter because of high costs of raw materials and new COVID-19 outbreaks.

The rapid spread of the delta variant of the coronavirus is forcing new shutdowns around the world as cases climb. That has increased concern that the pandemic isn’t over yet and has made gold more attractive as a hedge against uncertainty.

Meanwhile, producer Barrick Gold said Thursday that its second quarter production fell 5.4% from the first quarter because of planned maintenance shutdowns at the U.S.’s Nevada Gold Mine and the Dominican Republic’s Pueblo Viejo. It said it was on track to meet its 2021 output targets.

September silver futures advanced 0.5% Thursday to settle at $26.39 an ounce on Comex. The front-month contract gained 0.6% in the first four days of this week and 0.8% so far this month. Silver fell 6.5% in June after rallying 8.3% in May. The metal rose 47% in 2020 and is little changed so far this year. The September contract currently down $0.254 (-0.96%) an ounce to $26.140 and teh DG spot price is $26.13.

Spot palladium decreased 3.1% Thursday to $2,747.00 an ounce and is down 2.8% so far this week. It retreated 1.8% in June after losing 4.1% in May. It’s up 12% so far in 2021. Currently, the DG spot price is off $35.30 an ounce to $2,699.00

Spot platinum rose 0.9% Thursday to $1,144.00 an ounce and is up 3.3% in the first four days of this week and 5.9% so far in July. It dropped 9% in June after losing 1.5% in May. The autocatalyst metal is up 6.6% in 2021. The DG spot price is currently down $13.60 an ounce to $1,131.10.


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