Gold trades near four-and-a-half month high, rising early Monday as the U.S. dollar remains stuck near 3-month lows and questions about inflation arise, while investor focus turns to key economic reports due later this week from the from the United States.
The declines in the dollar made the yellow metal a more attractive alternate investment. Gold is also a traditional hedge against inflation. In addition, a steep drop in Bitcoin on Sunday has proven bullish for the precious metal, though the cryptocurrency has subsequently rebounded some.
Gold futures rose 2.2% last week to settle at $1,878.90 an ounce on Comex as the front-month contract rolled. The August contract fell $5 Friday. Futures are up 6.3% this month after gaining 3% in April and dropping in January, February and March. Gold climbed $372 — or 24% — in 2020 because of uncertainty about the economy and the pandemic. The June contract is currently up $3.50 an ounce to $1,880.20 and the DG spot price is $1,880.50.
Holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, gained 0.6% Friday to 1,042.92 metric tons, Reuters reported. Meanwhile, speculators increased their net long positions on Comex gold in the week ended May 18, according to the weekly Commitments of Traders report from the Commodity Futures Trading Commission.
Minutes of the last Federal Reserve policy meeting in April, which were released last week, indicated the central bank could reconsider its easy monetary policy if the economy continues to improve rapidly from pandemic declines. Many economists have called for a rollback because of corns about inflation, but the Fed has been outwardly determined to stay the course on stimulus measures to bring the economy out of the pandemic.
The COVID-19 virus has killed more than 3.46 million people worldwide and sickened 167.2 million. About 20% of the cases — and 17% of the deaths — are in the U.S. The country has more than 33.1 million cases, more than any other nation, though its proportion of both new cases and deaths has been declining as more Americans are vaccinated and other countries’ outbreaks worsen.
In upcoming economic news, the Consumer Confidence Index is due out tomorrow and Thursday is a big day with the U.S. initial jobless claims as well as GDP, durable goods and pending home sales data are due out. U.S. weekly initial jobless claims dropped to a pandemic-era low of 444,000 in the report released last week.
Front-month silver futures rose 0.4% last week to settle at $27.49 an ounce on Comex after the July contract dropped 2.1% Friday. Silver is up 6.2% so far this month after gaining 5.5% in April and dropping in February and March. It increased 47% in 2020. The July contract is currently up $0.309 an ounce to $27.795 and the DG spot price is $27.75.
Spot palladium lost 4.1% last week to $2,792.00 an ounce and fell 3.3% Friday. The metal is down 5.9% so far this month after jumping 12% in April amid strong industrial demand. Palladium also rose in February and March. It rallied 26% in 2020. Currently, the DG spot price is down $16.50 to $2,774.50.
Spot platinum declined 4.4% last week $1,176.10 an ounce after falling 3.3% Friday. Platinum has decreased 2.4% so far this month after gaining 0.8% in April after trading flat in March. The autocatalyst metal rose 11% in 2020. The DG spot price is currently up $2.40 an ounce to $1,176.60.
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