Gold Slips As Dollar Mildly Rebounds

Gold Slips As Dollar Mildly Rebounds

Gold slips this morning as the U.S. dollar mildly rebounds and investors continue to worry about the uncertainty over China’s Evergrande debt woes, which have roiled global markets. Platinum headed for its biggest weekly rally in six weeks.

Earlier Friday the yellow metal had rebounded to the $1,757 mark from its Thursday slump that was brought about by the Federal Reserve’s signal that it was likely to begin tapering its bond-buying program in November, earlier than many investors had expected.

December gold futures fell 1.6% Thursday to settle at $1,749.80 an ounce on Comex, the lowest closing price for a front-month contract since Aug. 10. The precious metal dropped $1.60 in the first four days of this week. Gold is down 3.8% this month after gaining just 90 cents in August. The yellow metal climbed $372 – or 24% – in 2020 because of uncertainty about the economy and the pandemic and is down 7.7% so far in 2021. Currently, the December contract is down $7.10 (-0.41%) to $1,742.70 and the DG spot price is $1,742.20.

Holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, fell 0.8% Thursday to 992.65 metric tons, Reuters reported.

Spot platinum fell 0.8% Thursday to $1,005.60 an ounce and is up 6.2% so far this week. The metal is down 1.9% so far this month and 6.3% so far this year. Currently, the DG spot price is down $28.50 an ounce to $978.40, even so platinum could break a two-week slump.

The dollar index slipped to a one-week low early Friday after the Fed announcement Wednesday. Chairman Jerome Powell said that the taper is likely to be done by the “middle of next year.”

The Bank of England said Thursday that the case for higher interest rates “appeared to have strengthened.” Higher interest rates are bearish for gold and other precious metals. The central banks have come under pressure to scale back pandemic stimulus measures sooner rather than later to combat rising inflation. Gold is a traditional hedge against inflation.

Powell is set to speak again Friday as he, Fed Governor Michelle Bowman and Vice Chairman Richard Clarida discuss the pandemic recovery, which investors are also continuing to watch for further direction.

Meanwhile, investors worried giant property developer Evergrande was poised to default on more than $300 billion in debt and could hurt China’s financial system — and the contagion could extend to markets around the world.

December silver futures decreased 1% Thursday to settle at $22.68 an ounce on Comex, and the front-month contract is up 1.5% for the first four days of the week. Silver is down 5.5% this month after dropping 6% in August, its third consecutive monthly decline. The metal rose 47% in 2020 and is down 14% 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 down $0.569 (-2.51%) an ounce to $22.110 and the DG spot price is $22.26.

Spot palladium fell 2.4% Thursday to $2,007.00 an ounce and is down 0.6% for the week. It has lost 19% so far this month after falling 7% in August. It has retreated 18% so far in 2021. The DG spot price fell $39.30 an ounce and is currently at $1,964.50.


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