Gold hovering around the $1,800 mark, but looks headed for its first weekly decline in five weeks, as strength in the U.S. dollar made it the preferred risk-off trade as the pandemic and economic picture worsened.
The U.S. currency traded near a three-and-a-half month high, making gold less attractive as an alternative investment. But the yellow metal is still getting some support from weakening Treasury yields.
Mounting cases of the delta variant of the coronavirus around the world have raised fears that the pandemic isn’t yet over, driving some investors to hedge against uncertainty. A weak U.S. jobs report Thursday also muddied the outlook.
December gold futures rose 0.1% Thursday to settle at $1,809.20 an ounce on Comex. The front-month contract, which rolled to December this week, slipped 0.3% in the first four days of the week. Gold has increased 2.1% 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 4.5% so far in 2021. The December contract is currently down $5.00 (-0.28%) an ounce to $1,804.20 while the DG spot price is $1,799.00.
The delta variant, a more infectious strain of COVID-19, is raging throughout the world, delaying reopenings and triggering new lockdowns and making investors nervous about another blow to the economy.
U.S. weekly jobless claims unexpectedly gained in the week ended July 17, putting a dent in expectations that the labor market was heading into a strong recovery this fall. It was the highest figure since May 15.
The European Central Bank, in a rate decision Thursday, pledged to keep interest rates low and monetary policy “persistently accommodative.” Investors are waiting for a policy announcement from the U.S. Federal Reserve next week for additional direction — and will also be looking to see how the central bank plans to deal with rising inflation.
September silver futures rose 0.5% Thursday to settle at $25.38 an ounce on Comex. The front-month contract lost 1.6% in the first four days of this week and settled at a three-month low of $25.00 Tuesday. The metal is down 3.1% so far this month. Silver fell 6.5% in June after rallying 8.3% in May. The metal rose 47% in 2020 and is down 3.9% so far this year. Silver price are tied to industrial demand, which could taper if lockdowns are reinstated and dampen manufacturing. The September contract is currently down $0.131 (-0.52%) an ounce to $25.250 and the DG spot price is $25.16.
Spot palladium increased 1.4% Thursday to $2,612.50 an ounce and is up 2.2% so far this week. It’s down 2.9% in July and up 11% so far in 2021. Currently, the DG spot price is up $4.90 an ounce to $2,719.50.
Spot platinum gained 0.9% Thursday to $1,097.70 an ounce and fell 1.6% so far this week. It’s up 1.6% so far in July. The autocatalyst metal is up 2.3% in 2021. The DG spot price is currently down $23.20 an ounce to $1,074.40.
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