Gold was little changed, hanging just under $1,900, early Wednesday as traders awaited U.S. inflation data and a monetary policy announcement from the European Central Bank for direction. The U.S. dollar’s mid-week weakness has given the yellow metal a slight boost.
August gold futures fell 0.2% Tuesday to settle at $1,894.40 an ounce on Comex, but is up 0.1% in the first two days of the week. The front-month contract advanced 7.8% in May, the best month for the precious metal since July. Gold gained 3% in April and dropped in January, February and March. Gold climbed $372 — or 24% — in 2020 because of uncertainty about the economy and the pandemic, though it’s little changed so far in 2021. The August contract is currently up $3.60 an ounce to $1,898.00 and the DG spot price is $1,896.30.
The ECB is set to announce a policy decision Thursday, an event seen as foreshadowing of the U.S. Federal Reserve meeting next week. The U.S. consumer price index will also be published Thursday, giving investors a snapshot into the level of the inflationary threat to the economy. Leaders of the Group of Seven will meet in England at the end of the week.
Many economists are concerned that the world’s central banks will be unable to maintain their dovish monetary policies in the face of rising inflation. Gold is a traditional hedge against inflation.
Meanwhile, new data showed that May factory-gate inflation in China rose at its fastest pace in more than a dozen years and consumer prices increased for a third straight month as the country’s economy rapidly rebounds from the pandemic, even as other parts of Asia remain hard hit by the virus.
The COVID-19 virus has killed about 3.75 million people worldwide and sickened around 174 million. About 19% of the cases — and 16% of the deaths — are in the U.S. The country has about 33.4 million cases, more than any other nation, though its proportion of both new cases and deaths has been declining and places like India have escalated.
July silver futures lost 1% Tuesday to settle at $27.73 an ounce on Comex. They dropped 0.6% in the first two days of the week. Silver gained 8.3% in May in the best monthly performance since December. The metal increased 5.5% in April and dropped in February and March. It advanced 47% in 2020 and is up 5% so far this year. The July contract is up $0.264 an ounce to $27.995 and the DG spot price is $27.97.
Spot palladium retreated 1.1% Tuesday to $2,819.00 and is also down 1.1% so far this week. It lost 4.1% in May. It’s up 15% so far in 2021. Currently, the DG spot price is flat at $2,822.00 an ounce.
Spot platinum fell 1.1% Tuesday to $1,166.10 an ounce and is down 0.6% for the first two days of the week. It lost 1.5% in May. The autocatalyst metal is up 8.6% in 2021. The DG spot price for platinum is currently up $2.10 an ounce to $1,169.80.
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