Gold slips on firming dollar, losing some early morning lift that grew on the prospect of further stimulus measures as the pandemic worsens ahead of Wednesday’s Fed minutes.
President Joe Biden has proposed a $1.9 trillion bipartisan relief measure, but Republicans lawmakers are pushing back. Gold typically acts as a hedge against inflation that can follow stimulus measures, so expectations that the bill will pass is keeping a floor under bullion prices, as is the weaker dollar. But stronger equities make gold less attractive as an alternative investment.
Investors are also awaiting further direction from the Federal Reserve, the International Monetary Fund and world leaders, central bankers and economists all expected to speak or issue statements this week that may lend further insight into the state of global economy.
Front-month gold futures rose 1.6% last week to settle at $1,859.90 an ounce on Comex. The April contract slipped 0.5% Friday and is down 1.9% so far this month. Gold climbed $372 — or 24% — in 2020 because of uncertainty about the economy and the coronavirus pandemic. The February contract is currently down $5 an ounce to $1,851.00 and the DG spot price is $1,856.30.
Fed policy makers will begin their first meeting of 2021 Tuesday, concluding with a press conference by Fed Chairman Jerome Powell on Wednesday. Meanwhile, the IMF is scheduled to update its global economic outlook Tuesday. Eonomists and central bankers from around the world are set to speak this week at the World Economic Forum — the annual gathering typically held in Davos, Switzerland, but going virtual this year because of the pandemic.
The COVID-19 virus has killed almost 2.13 million people worldwide and sickened almost 99.2 million. About 25% of the cases — and 20% of the deaths — are in the U.S. The country has more than 25.1 million cases, more than any other nation.
Front-month silver futures rose 2.8% last week to settle at $25.56 an ounce on Comex. The March contract retreated 1.2% Friday. Silver is down 3.2% this month after surging 17% in December and 47% in 2020. Currently, the March contract is down $0.05 an ounce to $25.455 and the DG spot price is $25.51.
Spot palladium fell 0.9% last week to $2,382.00 an ounce. It lost 0.5% Friday and is down 2.8% this month. Palladium rallied 2% in December and 26% in 2020. Currently, the DG spot price is off $30 an ounce to $2,352.50.
Spot platinum gained 1.4% last week to $1,106.20 an ounce after dropping 1.8% Friday. It’s up 3.1% this month. The metal added 11% in December and 11% in 2020. The DG spot price is down currently just over $5 an ounce to $1,104.80.
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