Gold off seven-week high on profit taking, after surging in the first few hours of the trading day to $1,790 an ounce on a weakened dollar and falling treasury yields. Equities are also falling from record highs this morning.
The yellow metal seeing some correction over the past hour, losing .50% or $9.10 an ounce. Front-month gold futures rose 2% last week to $1,780.20 an ounce on Comex, the contracts second consecutive weekly rally after three weeks of declines. The June contract advanced 0.8% Friday. Futures are up 3.8% so far this month 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 down $8.40 an ounce to $1,771.80 and the DG spot price is $1,770.30.
The U.S. dollar index traded near a one-month low, reducing the opportunity cost of holding gold. Treasurys, which have surged in recent months as investors sought protection against expected inflation from economic stimulus efforts, also neared multiweek lows.
The U.S. Federal Reserve and other central banks have committed to maintaining an accommodative monetary policy until the economic crisis triggered by the COVID-19 pandemic is over, raising fears of inflation. Gold, Treasurys and the dollar are traditional hedges against inflation, but the other two assets have received most of the buying interest in recent months.
Fed officials have indicated that any increase in inflation is likely to be temporary. The European Central Bank is set to issue a monetary policy decision on Thursday, but it is widely expected to keep rates unchanged.
In upcoming economic news, investors will be watching for the release of U.S. initial jobless claims on Thursday.
Better jobless numbers and increased vaccination rates in the U.S. may be signals that the worst of the pandemic is winding to a close. Half of all U.S. adults have received at least one vaccination for COVID-19, the federal government announced Sunday. And the weekly jobs report last week showed that applications for unemployment benefits dropped to the lowest level since the pandemic began.
The COVID-19 virus has killed almost 3.02 million people worldwide and sickened more than 141.1 million. About 22% of the cases — and 19% of the deaths — are in the U.S. The country has almost 31.7 million cases, more than any other nation.
May silver futures increased 3.1% last week to settle at $26.11 an ounce on Comex. The contract added 0.5% Friday. Silver is up 6.4% in April after dropping in February and March. It gained 47% in 2020. The May contract is currently down $0.245 an ounce to $25.860 and the DG spot price is $25.84.
Spot platinum advanced 80 cents last week to $1,213.50 an ounce and gained 0.7% Friday. Platinum is up 1.5% in April after trading flat in March. The autocatalyst metal rose 11% in 2020. The DG spot price is currently up $12.00 an ounce to $1,226.10.
Spot palladium gained 5.1% last week to $2,798.50 an ounce and increased 1.5% Friday. Palladium is up 6.1% this month after rising in February and March. It rallied 26% in 2020. Currently, the DG spot price is up $43.00 an ounce to $2,838.50.
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