Gold Holds – Bond Yield Retreats

Gold Holds - Bond Yield Retreats

Gold holds as bond yield retreats. The yellow metal is on track for a second weekly gain as a correction in the 10-year Treasury yield offers a boost.

Yields were near a 14-month high and the dollar index rebounded from a two-week low after the U.S. Federal Reserve said Wednesday that it would continue with an aggressive monetary policy, including stimulus measures, which are forecast to trigger inflation. U.S. President Joe Biden signed a $1.9 trillion stimulus bill last week.

The Fed also indicated that a spike in inflation would be temporary and issued the strongest projections for
economic growth in almost four decades. Gold is often used as a risk-off asset, so a booming economy would be bearish for the precious metal.

This morning, the Federal Reserve said it will NOT extend a pandemic-era rule that allowed banks to relax capital levels. In response, U.S. stock futures reversed earlier gains and turned negative. Gold has shown little reaction to the announcement.

Gold futures settled at $1,734.60 an ounce Thursday on Comex as the most-active contract rolled to June. The front-month contract advanced 0.9% in the first four days of the week. Gold is up 0.3% so far this month after posting its worst month since 2016 in February. Gold climbed $372 — or 24% — in 2020 because of uncertainty about the economy and the pandemic. The April contract is up currently up by $3.80 to $1,737.50 and the DG spot price is $1,736.70.

The COVID-19 virus has killed more than 2.69 million people worldwide and sickened more than 121.8 million. About 24% of the cases — and 20% of the deaths — are in the U.S. The country has more than 29.7 million cases, more than any other nation.

May silver futures increased 1.1% Thursday to settle at $26.35 an ounce on Comex, and the metal is up 1.7% so far this week. Silver is down 0.3% so far this month after decreasing 1.8% in February, its first retreat in three months. It gained 1.9% in January and 47% in 2020. The May contract is down by $0.076 to $26.275, currently, and the DG spot price is $26.25.

Spot platinum gained 1.7% Thursday to $1,225.40 an ounce, and it’s up 1.8% so far this week. The metal has gained 2.5% in March after rallying 11% in February amid forecasts for higher demand and tighter supplies. The autocatalyst metal advanced 0.5% in January and 11% in 2020. THe DG spot price is currently down $35.90 to $1,186.40.

Spot palladium increased 4.3% Thursday to $2,686.50 an ounce and is up 13% this week on news that two mines of a major Russian producer are flooded, forcing the producer to seriously cutback on its 2021 output forecast. Palladium has advanced 15% in March. It gained 4.9% in February, plummeted 9% in January and rallied 26% in 2020. The current DG spot price is down $62.80 to $2,630.00.


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