Gold Rises on Biden Tax Plan

Gold Rises on Biden Tax Plan

Gold rises early Friday as a safe-haven investment as details on the Biden tax plan make headlines. President Joe Biden’s plans to boost the capital-gains tax sent investors out of equities, the dollar and Treasurys giving gold a shot at its third weekly gain as it hovers just under $1,800.

The president’s proposal would almost double the capital gains tax for people earning more than $1 million a year and raise the top marginal tax rate to pay for education, childcare and other measures. The move targets households earning more than $400,000 a year.

Equities and the dollar were softer, and Treasury yields slipped on the news, making gold a more attractive alternative investment.

Front-month gold futures fell 0.6% Thursday to $1,782.00 an ounce on Comex. The June contract is up 0.1% so far this week, heading for its third weekly advance. Futures are up 3.9% so far this month after dropping in January, February and March. Gold climbed $372 — or 24% — in 2020 because of uncertainty about the economy and the pandemic. Currently, the June contract is up $8.70 an ounce to $1,790.7 and the DG spot price is $1,788.70.

Gold also gained support after Switzerland reported its biggest monthly gold exports in 10 months in March as shipments to India jumped to the highest level since 2013.

Meanwhile, the Silver Institute forecast Thursday that global demand for the metal will rise to its highest level since 2015 as the world’s economy grows as it emerges from the pandemic.

July silver futures fell 1.5% Thursday to $26.22 an ounce on Comex. The front-month contract increased 0.4% in the first four days of the week, as the most-active contract rolled to July. Silver is up 6.9% in April after dropping in February and March. It gained 47% in 2020. The June contract is currently up $0.175 to $26.375 and the DG spot price is $26.32.

In economic news, the European Central Bank kept its accommodative monetary policy in place Thursday. That’s bullish for precious metals, which are seen as a hedge against inflation which can result from economic stimulus measures.

Investors are likely to watch for the results of next week’s U.S. Federal Reserve policy meeting for further direction. The Fed has committed to maintaining an accommodative monetary policy until the economic crisis triggered by the COVID-19 pandemic ends. U.S. weekly initial jobless claims fell to a pandemic-era low in a report Thursday.

The COVID-19 virus has killed almost 3.07 million people worldwide and sickened almost 144.4 million. About 22% of the cases — and 19% of the deaths — are in the U.S. The country has almost 32 million cases, more than any other nation.

Spot platinum retreated 0.6% Thursday to $1,212.20 an ounce and lost 0.1% in the first four days of the week. Platinum is up 1.4% in April after trading flat in March. The autocatalyst metal rose 11% in 2020. The DG spot price for platinum is up $34.60 to $1,246.10.

Spot palladium dropped 1.5% Thursday to $2,849.50 an ounce and gained 1.8% in the first four days of the week. Palladium is up 8% this month after rising in February and March. It rallied 26% in 2020. Currently, the DG spot price is up $57.10 to $2,915.00.


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