Gold Slips Ahead of Fed

Gold Slips Ahead of Fed

Gold slips ahead of Fed as U.S. 10-year Treasury yields rose to near 2-week high and the dollar index rose 0.1%.

Investors await the U.S. Federal Reserve’s monetary policy announcement at 2 pm EDT for guidance on the state of the pandemic-hit economy and further direction.

Front-month gold futures slipped $1.30 Tuesday to settle at $1,778.80 an ounce on Comex. The June contract is up $1 in the first two days of the week. It has risen 3.7% 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. The June contract is down $9.70 an ounce, currently, to $1,769.10 and the DG spot price is $1,770.90.

Spot palladium gained 1.5% Tuesday to $2,975.00 an ounce and has advanced 3.6% so far this week. It traded at a record $2,962.50 an ounce Tuesday amid strong industrial demand. Palladium is up 13% this month after rising in February and March. It rallied 26% in 2020. Currently, the DG spot price is off $26.60 an ounce to $2,946.00.

In economic news released Tuesday, U.S. home prices surged by 12% in February, the biggest monthly gain since 2006, according to the S&P CoreLogic Case-Shiller national home price index. Consumer confidence jumped to a 14-month high for April amid an increased pace of vaccinations and federal stimulus.

Investors will be closely watching Fed Chairman Jerome Powell’s press conference Wednesday. The Fed has committed to maintaining an accommodative monetary policy until the economic crisis triggered by the pandemic ends. The European Central Bank kept its accommodative monetary policy in place last week. Stimulus measures are considered bullish for precious metals, which have historically been used as a hedge against any resulting inflation.

In upcoming news, initial jobless claims and first-quarter GDP data Thursday and core inflation Friday are expected to give further signals on the state of the economy. U.S. weekly initial jobless claims fell to a pandemic-era low in the report released last week.

The COVID-19 virus has killed more than 3.13 million people worldwide and sickened more than 148.3 million. About 22% of the cases — and 18% of the deaths — are in the U.S. The country has almost 32.2 million cases, more than any other nation. Meanwhile, India reported more than 300,000 new confirmed COVID-19 cases for the sixth day in a row Tuesday as global cases surged at the same time the U.S. vaccination rate seems to be slowing.

Front-month silver futures rose 0.8% Tuesday to $26.45 an ounce on Comex. The July contract gained 1.3% in the first two days of the week. Silver is up 7.8% in April after dropping in February and March. It gained 47% in 2020. Currently, The June contract is down $0.405 an ounce to $26.045 and the DG spot price is $26.05.

Spot platinum rose 0.2% Tuesday to $1,251.60 an ounce and gained 1.3% in the first two days of the week. Platinum is up 4.7% in April after trading flat in March. The autocatalyst metal rose 11% in 2020. Currently, The DG spot price is down $35.60 an ounce to $1,218.40.

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