Gold Pushes Back Against Stronger Dollar

Gold Pushes Back Against Stronger Dollar

Gold pushes back against a stronger dollar with support from weaker U.S. bond yields this morning, as traders await this week’s inflation data while nervously eyeing the rise of coronavirus cases.

Prices that producers get for final demand goods and services surged at at least their highest annual rate since 2010, according to data for August released by the U.S. Labor Department Friday. The measure of inflation — which rose 0.7% for the month, above analysts estimates — is closely watched by Federal Reserve policy makers as an economic indicator. The report may affect the pace of the Fed’s tapering of stimulus measures.

December gold futures fell 2.3% last week to settle at $1,792.10 an ounce on Comex. The precious metal retreated 0.4% Friday. Gold is down 1.4% this month after gaining just 90 cents in August. The yellow metal climbed $372 – or 24% – in 2020 because of uncertainty about the economy and the pandemic and is down 5.4% so far in 2021. The December contract is currently up $1.30 (+0.07%) an ounce to $1,793.40 and the DG spot price is $1,794.10.

Speculators cut their net long positions in Comex gold by 15,324 contracts to 83,540 contracts in the week ended Sept. 7, according to the latest Commitments of Traders report from the U.S. Commodities Futures Trading Commission, released Friday.

Physical gold demand in India was subdued last week as investors awaited a clearer price trajectory, Reuters reported.

Even after the PPI report came out Friday, Cleveland Fed President Loretta Mester said that she would still like the central bank to begin tapering asset purchases this year. The next meeting of Fed policymakers is in two weeks. Last week, the European Central Bank announced it was slowing its bond purchases as inflation surges.

In upcoming economic news, the U.S. consumer price index data comes out Tuesday, with the Empire state index and industrial production data on Wednesday. Thursday brings the release of the weekly U.S. initial jobless claims. Data released last week showed initial jobless claims were at a pandemic-era low. Investors are also watching the unfolding pandemic.

December silver futures lost 3.6% last week to settle at $23.90 an ounce on Comex. The front-month contract fell 1.2% Friday. Silver is down 0.4% this month after dropping 6% in August, its third consecutive monthly decline. The metal rose 47% in 2020 and is down 9.5% so far this year. Silver prices are tied to industrial demand, which could taper if lockdowns are reinstated and dampen manufacturing. The December contract is currently down $0.355 (-1.49%) an ounce to $23.545 and the DG spot price is $23.66.

Spot palladium traded at $2,149.50 an ounce, near the lowest level in more than a year. It’s down 14% so far this month after falling 7% in August. It’s down 12% so far in 2021. The DG spot price is currently up $13.70 an ounce to $2,173.00.

Spot platinum traded at $968.60 an ounce. It’s down 5.5% so far this month, extending August’s 3.8% losses. It’s down 9.8% in 2021. Currently, the DG spot price is down $7.00 an ounce to $964.00.


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