Gold returns near four-month high after briefly dipping this morning on a strengthening dollar. Meanwhile investors await the minutes of the Federal Reserve’s last policy meeting for insight into whether members of the Federal Open Market Committee are divided on their accommodative monetary stance and approach to inflation.
The dollar looked set to break a three-day losing streak, which whacked the price of gold by over $20 an ounce in early trading, but then investors stepped in to buy the dips, bringing the yellow metal back above $1,870 an ounce.
The central bank has pledged to keep interest rates low until the economy and labor market rebound from the pandemic and has dismissed an increase in inflation as bound to be short lived. Gold is a traditional hedge against inflation, and low interest rates are also bullish for the yellow metal.
Front-month gold futures rose 40 cents Tuesday to settle at $1,868.00 an ounce Tuesday on Comex. The June contract advanced 1.6% in the first two days of the week. Futures rose 3% in April after dropping in January, February and March. Gold climbed $372 — or 24% — in 2020 because of uncertainty about the economy and the pandemic. Currently, the June contract is up $1.60 an ounce to $1,869.60 and the DG spot price is $1,872.00.
Equities declined amid global concern about inflation, which rose to the highest level in nearly 13 years in April. Meanwhile, the number of global COVID-19 cases mounted.
The COVID-19 virus has killed almost 3.4 million people worldwide and sickened almost 164 million. About 20% of the cases — and 17% of the deaths — are in the U.S. The country has more than 33 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 addition to the Fed minutes which will be released at 2 pm EST today, St. Louis Fed President James Bullard and Atlanta Fed President Raphael Bostic are scheduled to speak at separate events Wednesday, while IMF Managing Director Kristalina Georgieva and European Central Bank President Christine Lagarde are scheduled to speak Thursday.
In economic news, U.S. weekly initial jobless claims are set for release Thursday, while home sales and manufacturing data come out Friday.
Front-month silver futures rose 0.2% Tuesday to settle at $28.33 an ounce on Comex, and the July contract jumped 3.5% in the first two days of the week. Silver rose 5.5% in April after dropping in February and March. It increased 47% in 2020. The July contract is down $0.548 an ounce to $27.785 and the DG spot price is $27.74.
Spot palladium gained 0.5% Tuesday to $2,923.00 an ounce and is up roughly the same amount for the week. The metal jumped 12% last month amid strong industrial demand. Palladium also rose in February and March. It rallied 26% in 2020. The DG spot price is currently down $37.60 an ounce to $2,881.50.
Spot platinum fell 1.4% Tuesday to $1,228.00 an ounce and retreated 0.2% so far this week. Platinum increased 0.8% in April after trading flat in March. The autocatalyst metal rose 11% in 2020. Currently, the DG spot price is down $31.10 to $1,198.20.
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