Gold slips over $10 an ounce relinquishing the ground it had regained early Friday, as next week’s Fed meeting loom. The yellow metal had dropped to the lowest level in more than a month in the previous session amid strength in the dollar.
The yellow metal is poised for a weekly decline as the dollar held near a three-week high. Meanwhile, investors were awaiting next week’s meeting of Federal Reserve policymakers and their decision on when to taper off pandemic stimulus measures for further direction.
December gold futures tumbled 2.1% Thursday to settle at $1,756.70 an ounce on Comex and the precious metal dropped 2% in the first two four of the week. Gold is down 3.4% 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 7.3% so far in 2021. The December contract is down $4.70 (-0.27%) to $1,752.00 and the DG spot price is $1,751.00.
Fed policymakers have come under pressure to scale back pandemic stimulus measures sooner rather than later to combat rising inflation levels. Gold is a traditional hedge against inflation, as are the dollar and Treasurys. But strength in the other assets can make it more expensive for investors to hold bullion, pressuring gold prices.
An unexpected increase in U.S. retail sales in August data released Thursday raised expectations that the Fed would taper stimulus sooner, and that boosted the dollar. Signs of economic health are seen as indicators that the economy won’t need the stimulus for much longer.
U.S. retail sales rose 0.7% last month, though economists surveyed by Reuters had forecast a 0.8% drop. Data for July was revised down to show a 1.8% decline instead of a 1.1% decrease.
In other economic news, U.S. initial jobless claims jumped last week, but remained near a pandemic low, according to data released Thursday by the Labor Department.
Investors also continued to watch the ongoing pandemic for further direction.
December silver futures decreased 4.2% Thursday to settle at $22.79 an ounce on Comex, and the front-month contract dropped 4.6% in the first four days of the week. Silver is down 5.1% 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 $0.179 (-0.79%) an ounce to $22.615 and the DG spot price is $22.65.
Spot palladium traded at $2,050.00 an ounce Thursday. It’s down 4.6% so far this week and 18% so far this month after falling 7% in August. It has lost 16% so far in 2021. Currently, the DG spot price is down $21.50 an ounce to $2030.50.
Spot platinum traded at $940.50 an ounce Thursday. It’s down 2.9% this week, 8.3% so far this month and 12% so far this year. The DG spot price is currently up $18.50 an ounce to $958.50.
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