Gold rose early Monday as the dollar retreated and concerns grew that the spread of the delta variant of the coronavirus would worsen, impacting the global economy.
The dollar came off multimonth highs reached last week, making gold more attractive as an alternative investment. Gold typically rises when the dollar falls. Meanwhile, speculation grew that the spread of the delta variant may delay stimulus tapering efforts by the U.S. Federal Reserve.
The release of the U.S. Market manufacturing PMI and existing home sales data this morning may provide additional direction.
December gold futures rose 0.3% last week to settle at $1,784.00 an ounce Friday on Comex. The precious metal traded in a tight range all week and only increased 90 cents Friday. Gold is down 1.8% so far this month after increasing for the third time in four months in July. The yellow metal climbed $372 — or 24% — in 2020 because of uncertainty about the economy and the pandemic and is down 5.9% so far in 2021. The December contract is up $22.40 (+1.25%) to $1,806.40 and the DG spot price is $1,805.70.
Dallas Fed President Rob Kaplan said Friday that he could reconsider his position that the central bank should start tapering its asset-purchase program sooner rather than later if the delta variant lingers and affects the economy. Investors will be awaiting further signals from speakers at the Fed’s annual gathering at the end of the week in Jackson Hole, Wyoming, which is being held virtually this year.
In addition, investors will be watching for data on U.S. GDP and weekly initial jobless claims Thursday and July personal income and spending data Friday. The personal consumption expenditures price index will also likely be closely monitored as an inflation measure closely watched by Fed policymakers.
December silver futures fell 2.6% last week to settle at $23.16 an ounce on Comex. The front-month contract — which rolled from September last week — decreased 0.5% Friday. Silver has lost 9.3% so far this month after dropping 2.5% in July. The metal rose 47% in 2020 and is down 12% so far this year. Silver prices are tied to industrial demand, which could taper if lockdowns are reinstated and dampen manufacturing. The December contract is currently up $0.485 (+2.13%) to $23.645 an ounce and the DG spot price is $23.63.
Palladium and platinum, both used in the manufacture of computer chips for the automotive industry, came under pressure last week amid a shortage of the chips, but this morning saw the platinum group metals jump more than 2% each.
Spot palladium fell 14% last week to $2,284.50 an ounce and lost 1.6% Friday. It’s down 15% in August and 6.8% so far in 2021. Currently, the DG spot price shows a steep jump, up $60.00 an ounce to $2,353.50.
Spot platinum retreated 3.4% last week to $1,002.90 an ounce, though it advanced 2% Friday. The metal has decreased 5.2% in August and is down 6.6% in 2021. The DG spot price is currently up $19.80 an ounce to $1.025.20.
Disclaimer: This editorial has been prepared by Dillon Gage Metals for information and thought-provoking purposes only and does not purport to predict or forecast actual results. This editorial opinion is not to be construed as investment advice or as a recommendation regarding any particular security, commodity or course of action. Opinions expressed herein cannot be attributable to Dillon Gage. Reasonable people may disagree about the events discussed or opinions expressed herein. In the event any of the assumptions used herein do not come to fruition, results are likely to vary substantially. It is not a solicitation or advice to make any exchange in commodities, securities or other financial instruments. No part of this editorial may be reproduced in any manner, in whole or in part, without the prior written permission of Dillon Gage Metals. Dillon Gage Metals shall not have any liability for any damages of any kind whatsoever relating to this editorial. You should consult your advisers with respect to these areas. By posting this editorial, you acknowledge, understand and accept this disclaimer.