Gold muted ahead of FOMC, losing a little altitude as U.S. bond yields climb this morning. Inflation fears boosted both the precious metal and U.S. Treasury yields, which were near their highest levels in more than a year. Investors are primarily awaiting a policy statement from the U.S. Federal Reserve.
The Fed will issue a statement this afternoon at the end of the Federal Open Market Committee (FOMC) meeting, and Fed Chairman Jerome Powell will hold a press conference. Both are expected give investors further direction on the economy one year after the coronavirus pandemic began. Investors are also expected to listen for indications on whether the central bank will do anything to rein in Treasury yields and signal any plans to raise interest rates.
Treasuries, the dollar and gold are all traditional hedges against inflation, which some economists anticipate because of multitrillion-dollar stimulus measures to help the global economy emerge from the pandemic. But most of the recent trade has gone to Treasuries and the dollar, pressuring gold, which has an inverse relationship with the other assets. U.S. President Joe Biden signed a $1.9 trillion stimulus bill last week.
Gold futures rose 0.6% Tuesday to settle at $1,739.90 an ounce on Comex. The metal gained 1.2% in the first two days of this week. Gold is up 0.6% 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. Currently, the April contract is slightly down, off $1.90, to $1,730.30 and the DG spot price is $1,734.50.
The U.S. stimulus measure was designed as a shot in the arm to the U.S. economy and labor force, which are still reeling from the pandemic. The COVID-19 virus has killed more than 2.67 million people worldwide and sickened almost 120.7 million. About 24% of the cases — and 20% of the deaths — are in the U.S. The country has more than 29.5 million cases, more than any other nation.
May silver futures decreased 1.1% Tuesday to settle at $26.00 an ounce on Comex, though the metal is up 0.4% so far this week. Silver is down 1.7% 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 currently up $0.092 to $26.095 and the DG spot price is $26.11.
Spot platinum gained 0.4% Tuesday to $1,222.20 an ounce, and it’s up 1.5% so far this week. The metal is up 2.3% 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.
Spot palladium increased 4.6% Tuesday to $2,517.00 an ounce and is up 5.5% this week. It has advanced 7.6% in March after rallying 0.5% Friday. It gained 4.9% in February, plummeted 9% in January and rallied 26% in 2020.
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