Gold Rises As Dollar Slips

Gold Rises As Dollar Slips

Gold rises early Wednesday as dollar slips to a one-week low and expectations of a U.S. stimulus package — seen as bullish for the yellow metal — mounted. The bullion also took a strong bounce up on this morning’s inflation data.

U.S. consumer prices up moderately in January per the U.S. Labor Department. The consumer price index rose 0.3% last month after rising 0.4% in December. The CPI for the last 12 months is up 1.4%, slightly less than economists predicted. Gold rose almost 1% on the report.

April gold futures rose 0.2% Tuesday to settle at $1,837.50 an ounce on Comex. The front-month contract is up 1.4% in the first two days of this week after dropping 2% last week. Bullion fell 2.4% in January. Gold climbed $372 — or 24% — in 2020 because of uncertainty about the economy and the coronavirus pandemic. Currently, the April contract is up over $11 an ounce (0.63%) to $1,849.10 and the DG spot price is $1,844.60.

House Democrats continued to push the $1.9 trillion U.S. stimulus package through Congress and on Tuesday began holding the first of a lengthy series of committee meetings on portions of the package. The full House is expected to vote on the measure at the end of the month. President Joe Biden met Tuesday at the White House with the CEOs of JPMorgan Chase, Walmart, Gap, Lowe’s and others to drum up support for the measure. The latest provisions include raising the minimum wage to $15 an hour and a payment to parents of dependent children.

Investors are also watching the U.S. Senate, which voted Tuesday to move forward with an impeachment trial against former U.S. President Donald Trump for allegedly inciting an insurrection at the U.S. Capitol on Jan. 6.

In economic news, Federal Reserve Chairman Jerome Powell is scheduled to speak at a webinar this afternoon at 2 Eastern. Weekly initial jobless claims come out Thursday.

Economic reports are being closely watched after the January jobs report, released Friday, showed that the labor market is stalling, adding urgency to economic stimulus efforts on the part of proponents of the pandemic-relief legislation.

The COVID-19 virus has killed almost 2.34 million people worldwide and sickened almost 106.9 million. About 25% of the cases — and 20% of the deaths — are in the U.S. The country has almost 27.2 million cases, more than any other nation.

Front-month silver futures dropped 0.6% Tuesday to settle at $27.40 an ounce on Comex. The March contract gained 1.4% in the first two days of the week after rising 0.4% last week. The contract rallied 16% between Jan. 28 and Feb. 1, reaching an eight-year high. Silver futures increased 1.9% in January and 47% in 2020. The current March contract are up over 0.35% to $27.475 an ounce and the DG spot price is $27.43.

Platinum prices rallied to their highest in six years on Wednesday as economic recovery hopes boosted
demand for the auto-catalyst metal to over $1,250 an ounce. Spot platinum had advanced 1.1% Tuesday to $1,185.00 an ounce. The metal rose 4.8% last week. It gained 0.5% in January and 11% in 2020. Currently, the DG spot price is up $47.90 to $1,236.80.

Spot palladium decreased 0.5% Tuesday to $2,345 an ounce and has lost 0.6% so far this week. It increased 5.7% last week after plummeting 9% in January and rallying 26% in 2020. The DG spot price is currently up $55.90 an ounce to $2,400.00, driven in part by the surge in auto sales in China, the world’s biggest market, which rose last month’s 30% year-on-year. Platinum group metals are key elements in catalytic converters.


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