Gold slips early Monday as the dollar edged up from a one-month low, but the yellow metal has ticked up on this morning’s U.S. manufacturing PMI report for July, showing the lowest reading since January.
U.S. manufacturing pace slowed in July for the second straight month as shortages of raw materials persist. This morning, the Institute for Supply Management (ISM) reported national factory activity dropped to 59.5 last month, from 60.6 in June. A reading above 50 indicates expansion in manufacturing. The median forecast of economists had expected growth to tick up to 60.8% from 60.6% in June. DG spot gold has risen over $6 an ounce on the report.
Stocks kicking off the month with a bang this morning. With the Dow and the S&P 500 perched less than 1% from new all-time highs.
December gold futures rose 0.6% last week to settle at $1,817.20 an ounce on Comex, though the front-month contract slid 1% Friday. The precious metal increased 2.6% in July and increased for the third time in four months. Gold climbed $372 — or 24% — in 2020 because of uncertainty about the economy and the pandemic and is down 4.1% so far in 2021. The December contract is currently down $1.10 (-0.06%) an ounce to $1,816.10 and the DG spot price is $1,814.70.
In China, economic activity eased in July, with the official manufacturing purchasing managers’ index falling to 50.4 in July from 50.9 in June. Readings above 50 signal output growth.
The economic statistics and the state of the pandemic are likely to influence investors’ forecasts on when the Federal Reserve and other central banks around the world are likely to begin tapering their stimulus efforts.
The Fed signaled last week that it was likely to maintain its easy monetary policy in the near term, though Chairman Jerome Powell said officials are getting closer to being able to reduce stimulus measures. The Bank of England is scheduled to announce a policy decision this week that is anticipated to follow suit. Easy monetary policy is considered bullish for gold because the metal is a traditional hedge against the inflation that may follow.
Meanwhile, gold got some support from continued uncertainty about the delta variant and signals that the pandemic has yet to run its course. Dr. Anthony Fauci, the White House’s chief medical adviser, said Sunday on ABC that “things will get worse” in the delta variant-driven surge of COVID-19, but he doesn’t anticipate another round of lockdowns. His comments came as Florida broke records for COVID-19 hospitalizations.
September silver futures rose 1.2% last week to settle at $25.55 an ounce on Comex. The front-month contract retreated 0.9% Friday, and the metal dropped 2.5% in July. The metal rose 47% in 2020 and is down 3.3% so far this year. Silver prices are tied to industrial demand, which could taper if lockdowns are reinstated and dampen manufacturing. The September contract is currently down $0.042 (-0.16%) an ounce to $25.505 and the DG spot price is $25.53.
Spot palladium fell 0.3% last week to $2,674.00 an ounce and rose 0.5% Friday. It fell 4.3% in July and is up 9.1% so far in 2021. Currently, the DG spot price is up $30.30 an ounce to $2,700.00.
Spot platinum dropped 0.8% last week to $1,057.90 an ounce and retreated 1.6% Friday. The autocatalyst decreased 2.1% in July and is down 1.5% in 2021. The DG spot price is currently up $13.80 an ounce to $1,072.20.
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