Gold rises ahead of Biden’s inauguration, extending gains early Wednesday on speculation of a new U.S. stimulus package after testimony Tuesday by Treasury Secretary-designate Janet Yellen and in anticipation of President-elect Biden.
In her confirmation hearing, Yellen didn’t say that she backs a strong dollar, but she distanced herself from the idea of using favorable exchange-rate policy to obtain a U.S. competitive advantage, a contrast to outgoing Treasury Secretary Steven Mnuchin, who had expressed a preference for a weaker dollar. The dollar fell, spurring gold, which typically rises on a weaker U.S. currency.
Yellen also told the Senate Finance Committee that increased spending was needed to fight the coronavirus pandemic. Her comments echoed plans Biden outlined last week for a $1.9 trillion spending package to fight the coronavirus and its economic repercussions. Stimulus packages are considered bullish for gold.
Front-month gold futures rose 0.6% Tuesday to settle at $1,840.20 an ounce on Comex. There was no settlement for Comex-traded precious metals Monday because of the U.S. Martin Luther King Jr. Day holiday. But the metal dropped 0.3% last week. Gold climbed $372 — or 24% — in 2020 because of uncertainty about the economy and the coronavirus pandemic. Currently, the February contract is up over $9 an ounce to $1,849.20 and the DG spot price is $1,855.10.
Holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, fell 0.3% Tuesday to 1,174.13 metric tons, Reuters reported.
Meanwhile, the coronavirus pandemic continued to rage, with the U.S. death toll topping 400,000 Tuesday. The COVID-19 virus has killed almost 2.1 million people worldwide and sickened more than 96.1 million. About 25% of the cases — and 20% of the deaths — are in the U.S. The country has more than 24.2 million cases, more than any other nation.
Investors will be closely watching for any signs of unrest surrounding the inauguration of Biden, scheduled for noon in Washington. In economic news, weekly U.S. initial jobless claims are due out Thursday, along with housing starts data for December.
Front-month silver futures rose 1.8% Tuesday to settle at $25.32 an ounce on Comex. The March contract advanced 0.9% last week. Silver surged 17% in December and 47% in 2020. The March contract is up $0.11 an ounce to $25.430 and the DG spot price is $25.42.
Spot palladium was priced at $2,377.00 an ounce Tuesday, down 1.1% from Friday. It advanced 2% last week. Palladium rallied 2% in December and 26% in 2020. Currently, the DG spot price is up over $10 an ounce to $2,394.00.
Spot platinum was priced at $1,091.30 an ounce Tuesday after edging up 30 cents from Friday. It increased 3% last week. The metal added 11% in December and 11% in 2020. The DG spot price is currently up over $15 to $1,108.90 an ounce.
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