Gold recovering from overnight dip as equities face pressure and COVID cases grow. The yellow metal lost ground overnight on a stronger greenback, dropping below the $1,800 mark briefly, but bouncing back as investors take advantage of the dip.
The Dow was down over 500 points (over 1.5%) at the opening bell, ending a 3-week winning streak, as concerns over the rise of the Delta variant grow. The NASDAQ and S&P also struggling this morning, down 55 (-1.2%) and 139 (-0.92%) respectively.
Gold also got some support from declines in U.S. Treasury yields, which were near a one-week low, with 10-year yields dropping to a new 5-month low. Their retreat — and the climbing COVID-19 cases — have made the yellow metal more attractive as a hedge against uncertainty. But the dollar’s gains pressured prices. The dollar index was near a three-month high.
August gold futures rose 0.2% last week to settle at $1,815.00 an ounce on Comex. The front-month contract, which trading near a four-week high last week, slipped 0.8% Friday. Gold has increased 2.5% so far in July. It fell 7% in June in the worst month since November 2016 after advancing 7.8% in May, the best month for the precious metal since July 2020. Gold climbed $372 — or 24% — in 2020 because of uncertainty about the economy and the pandemic and is down 4.2% so far in 2021. The August contract is down $2.70 (-0.15%) an ounce to $1,812.30 and the DG spot price is $1,812.00.
The rapid spread of the delta variant of the coronavirus is forcing new shutdowns around the world as cases climb. That has increased concern that the pandemic isn’t over yet.
“Most people will either get vaccinated, or have been previously infected, or they will get this delta variant,” Dr. Scott Gottlieb, former commissioner of the U.S. Food & Drug Administration during the Trump Administration said Sunday on CBS’s “Face the Nation” program.
Investors will continue to watch for signals on how the economy is dealing with the latest development in the pandemic, including inflation and what the Federal Reserve will do about it. They will also look closely at the labor market.
The June U.S. inflation report last week showed consumer prices jumped the most since 2008 and beat all estimates. Gold is a traditional hedge against inflation. But U.S. weekly initial jobless claims reached a pandemic-era low in the report released last week.
Investors will await the latest weekly jobless claims on Thursday as well as the U.S. existing home sales report. The European Central Bank is scheduled to release a rate decision Thursday.
September silver futures fell 1.7% last week to settle at $25.80 an ounce on Comex. The front-month contract lost 2.3% Friday and is down 1.5% so far this month. Silver fell 6.5% in June after rallying 8.3% in May. The metal rose 47% in 2020 and is down 2.3% so far this year. The September contract is down $0.405 (-1.57%) an ounce to $25.398 and the DG spot price is $25.33.
Spot palladium decreased 6% last week $2,655.00 an ounce and retreated 3.4% Friday. It’s down 4.9% in July and up 8.3% so far in 2021. Currently, the DG spot price is down $47.30 an ounce to $2,603.00.
Spot platinum rose 0.8% last week to $1,115.90 an ounce and fell 2.5% Friday. It’s up 3.3% so far in July. The autocatalyst metal is up 4% in 2021. The DG spot price is down $23.10 an ounce to $1,093.80, currently.
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