Gold slips off near five-month high from Tuesday morning, as U.S. Treasury yields strengthened following a positive U.S. manufacturing report for May, though concerns about inflation kept a floor under prices.
Investors’ appetite for risk grew after the manufacturing report beat expectations for last month amid burgeoning demand as the economy reopened following the worst of the pandemic. Investors are awaiting Thursday’s release of the key May U.S. jobs report for signals on the state of the economy and further direction. But gold held near $1,900 an ounce amid worries about inflation.
August gold futures fell 30 cents Tuesday to settle at $1,905.00 an ounce on Comex. The front-month contract advanced 7.8% last month, making May the best month for the precious metal since July. Gold gained 3% in April and dropped in January, February and March. Gold climbed $372 — or 24% — in 2020 because of uncertainty about the economy and the pandemic. Currently, the August contract is up $2.30 to $1,907.30 and the DG spot price is $1,906.30.
The Institute for Supply Management reported its index of U.S. factory activity grew to 61.2 in May from 60.7 in April and above the 60.9 forecast by economists surveyed by Reuters. Readings above 50 indicate expansion. Manufacturing accounts for almost 12% of the economy.
Investors will next turn to the May jobs report due out Friday. U.S. initial jobless claims beat expectations and reached another pandemic-era low in the latest report released last week.
Gold advanced the most in 10 months in May as investors became increasingly concerned about inflation stemming from central bank stimulus measures used to prop up the economy during the pandemic. Gold is a traditional hedge against inflation.
The COVID-19 virus has killed about 3.57 million people worldwide and sickened around 171.2 million. About 19% of the cases — and 17% of the deaths — are in the U.S. The country has about 33.3 million cases, more than any other nation, though its proportion of both new cases and deaths has been declining as more Americans are vaccinated and other countries’ outbreaks worsen.
July silver futures rose 0.3% Tuesday to settle at $28.10 an ounce on Comex. The front-month contract gained 8.3% in May, in the best monthly performance since December. Silver increased 5.5% in April and dropped in February and March. It advanced 47% in 2020. The July contract is currently down $0.047 to $28.055 and the DG spot price is $28.03.
Spot palladium increased 0.7% Tuesday to $2,866.50 an ounce. It fell 4.1% in May, after jumping 12% in April amid strong industrial demand. Palladium also rose in February and March. It rallied 26% in 2020. Currently, the DG spot price is up $7.80 to $2,876.00.
Spot platinum gained 1.4% Tuesday to $1,204.50 an ounce. Platinum has decreased 1.5% last month after gaining 0.8% in April after trading flat in March. The autocatalyst metal rose 11% in 2020. The current DG spot price is down $8.00 to $1,194.70.
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