Gold rises to three-month high early Monday, past the $1,850 an ounce barrier, as Treasury yields weakened and the number of global COVID-19 cases mounted, making the yellow metal more attractive as a safe-haven investment.
Benchmark 10-year U.S. Treasury yields slipped to their lowest level in a week, boosting gold as an alternate investment. Meanwhile, coronavirus cases surged to almost 24.7 million Sunday in India, confirming the country’s status as the worst-hit country after the United States. Also in Asia, Singapore announced it was closing most schools starting Wednesday and Taiwan imposed new restrictions on gatherings.
Front-month gold futures rose 0.4% last week to settle at $1,838.10 an ounce Friday on Comex. The June contract advanced 0.8% Friday. Futures rose 3% in April after dropping in January, February and March. Gold climbed $372 — or 24% — in 2020 because of uncertainty about the economy and the pandemic. The June contract is currently up $16.80 an ounce to $1,854.90 and the DG spot price is $1,860.90.
Treasury yields dropped Friday after a U.S. report showed that a recent surge in U.S. retail sales stalled in April, even after a wave of stimulus spending which has triggered concern about inflation levels. Inflation rose to the highest level in nearly 13 years in April.
The Federal Reserve has indicated that it will keep interest rates low for the time being to support growth in the pandemic-hit economy, even as some critics have called for action to rein in inflation. Investors are likely to closely watch for signs that Fed policy makers may be split on the issue in the minutes of the last monetary policy meeting, due out on Wednesday. Gold is a traditional hedge against inflation.
The COVID-19 virus has killed almost 3.38 million people worldwide and sickened almost 162.8 million. About 20% of the cases — and 17% of the deaths — are in the U.S. The country has more than 32.9 million cases, more than any other nation, though its proportion of both new cases and deaths has been declining as the vaccination effort becomes more widespread and other parts of the world such as Asia have outbreaks.
Front-month silver futures fell 0.4% last week to settle at $27.37 an ounce on Comex, though the July contract jumped 1.1% Friday. Silver rose 5.5% in April after dropping in February and March. It increased 47% in 2020. The July contract is currently up $0.310 an ounce to $27.675 and the DG spot price is $27.76.
Spot palladium lost 1.2% last week to $2,910.00 an ounce, though it gained 1.8% Friday. The metal jumped 12% last month amid strong industrial demand. Palladium also rose in February and March. It rallied 26% in 2020. Currently, the DG spot price is up $1.40 an ounce to $2,912.00.
Spot platinum fell 2.1% last week to $1,230.80 an ounce, though it advanced 1.7% Friday. Platinum increased 0.8% in April after trading flat in March. The autocatalyst metal rose 11% in 2020. The current DG spot price is up $12.70 an ounce to $1,240.10.
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