Spot gold touched $1,984.66 an ounce early Monday as futures also rallied to $1997.49 an ounce. The near brush with $2,000 pulled back a bit When the rebounding dollar fueled some profit-taking. “The dollar’s correction from a two-year low is taking some shine off gold,” independent analyst Ross Norman told Reuters. “We seem to be in a period of consolidation and we’ve seen some profit-taking.”
The release of the key U.S. ISM Manufacturing Index for July provided investors with further direction. It showed a small uptick to 54.2 versus the expected 53.6. Spot gold reacted with an uptick steadily heading back past $1,970.
Gold futures climbed 3.2% last week to settle Friday at $1,985.90 an ounce on Comex, capping a 10% surge in July. The December contract advanced 1% Friday. Monday’s increase was limited by a strengthening dollar, which is typically bearish for gold. The greenback has lost 10% of its value since March, as the pandemic has raged. Currently, the December contract is $1,980.90, while DG spot price is down a bit at $1,970.60.
Silver futures rose 6% last week to settle at $24.22 an ounce on Comex, capping a 30% rally for the month of July. The September contract gained 3.7% Friday. Currently, the September contract is $24.330, while DG spot price is up to $24.30.
Speculators cut their bullish positions in Comex gold and silver in the week ended July 28, according to the weekly Commitments of Traders report from the U.S. Commodities Futures Trading Commission, released Friday.
The virus known as COVID-19 has killed more than 688,000 people worldwide and sickened more than 18 million. About 26% of the cases — and 22% of the deaths — are in the U.S. The country has 4.67 million cases, more than any other nation.
Cases of the virus continued to mount in the U.S., and the Trump administration’s coronavirus coordinator, Dr. Deborah Birx, said on CNN Sunday that the country has entered a “new phase” of the pandemic that is much worse than the spring. She encouraged people who live with others in areas with mounting infection rates to consider wearing a mask at home.
The economic impact of the pandemic has been profound — and provided a significant boost to precious metals as investors have sought the risk-off trade. U.S. GDP contracted by 32.9% in the second quarter, compared with the year earlier, shattering all previous quarterly records, Tens of millions of people have lost their jobs. Monthly unemployment data set to come out Friday will give investors additional information about the state of the economy.
Meanwhile, gold continued to get a boost from a standoff between the U.S. and China. U.S. Secretary of State Mike Pompeo said Sunday on Fox that the president would take action in the coming days against Chinese-owned software that he thinks threatens national security.
Chinese manufacturing rose at the fastest pace in nine years in July, a private gauge showed Monday. The Caixin China manufacturing purchasing managers index rose to 52.8 in July from 51.2 in June, Caixin and researcher Markit reported.
Spot palladium fell 7.1% last week to $2,122.00 an ounce, though it rose 7% in July. The metal increased 0.8% Friday. Spot platinum dropped 1.9% last week to $907.60 an ounce, but was up 8.3% for the month. It edged up 0.1% Friday. Currently, the DG spot price for platinum is up at $928.50 and palladium is down to $2,218.70.
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