Gold rebounds from last week’s drop on softer dollar and slipping U.S. Treasury yields. Bargain hunters also did some gold buying after the yellow metal’s worst week since March 2020.
August gold futures fell 0.4% Friday to settle at $1,768.40 an ounce on Comex after hawkish signals from the Federal Reserve. The front-month contract is down 7.2% so far this month after advancing 7.8% in May, the best month for the precious metal since July. Gold gained 3% in April and dropped in January, February and March. Gold climbed $372 — or 24% — in 2020 because of uncertainty about the economy and the pandemic and is down 6.7% so far in 2021. The August contract is up $7.80 an ounce to $1,776.80 and the DG spot price is $1,779.40.
Holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, increased 1.1% Friday to 1,053.07 metric tons, Reuters reported.
The U.S. 30-year yield fell below 2% for the first time since February, giving gold a boost, but the dollar held near the highest level in months, adding pressure to the precious metal.
Last week, gold tumbled and the dollar and bond yields strengthened on Fed signals that it was considering tapering its loose monetary policy sooner than previously anticipated as the economy rebounds from the COVID-19 pandemic. St. Louis Fed President James Bullard said Friday that inflation may cause the central bank to consider raising interest rates next year.
Fed Chairman Jerome Powell is scheduled to testify before a House subcommittee Tuesday, and investors are likely to listen closely for further indications on how the central bank views inflation and the pandemic recovery.
The COVID-19 virus has killed about 3.86 million people worldwide and sickened around 178.4 million. The U.S. has had more cases than any other nation, but domestic levels are dropping as vaccination becomes more widespread.
In other economic news this week, investors will likely watch for June manufacturing and new home sales data Wednesday, weekly initial jobless claims Thursday and May personal income, consumer spending and personal consumption data Friday.
July silver futures dropped 7.7% last week to settle at $25.97 an ounce on Comex. They rose 0.4% Friday. Silver gained 8.3% in May in the best monthly performance since December. The metal advanced 5.5% in April and dropped in February and March. It rose 47% in 2020 and is down 1.7% so far this year. The July contract is up $0.041 an ounce to $26.010 and the DG spot price is $26.00.
Spot palladium decreased 11% last week to $2,478.00 after falling 2.3% Friday. It lost 4.1% in May. It’s up 1.1% so far in 2021. Currently, the DG spot price is up $39.10 an ounce to $2,528.00
Spot platinum fell 12% last week to $1,049.70 an ounce after dropping 1% Friday. It lost 1.5% in May. The autocatalyst metal is down 2.2% in 2021. The DG spot price is currently up $0.60 an ounce to $1,052.00.
Disclaimer: This editorial has been prepared by Dillon Gage Metals for information and thought-provoking purposes only and does not purport to predict or forecast actual results. This editorial opinion is not to be construed as investment advice or as a recommendation regarding any particular security, commodity or course of action. Opinions expressed herein cannot be attributable to Dillon Gage. Reasonable people may disagree about the events discussed or opinions expressed herein. In the event any of the assumptions used herein do not come to fruition, results are likely to vary substantially. It is not a solicitation or advice to make any exchange in commodities, securities or other financial instruments. No part of this editorial may be reproduced in any manner, in whole or in part, without the prior written permission of Dillon Gage Metals. Dillon Gage Metals shall not have any liability for any damages of any kind whatsoever relating to this editorial. You should consult your advisers with respect to these areas. By posting this editorial, you acknowledge, understand and accept this disclaimer.