Gold slips this morning after new report of inflation rise. The yellow metal is also somewhat depressed as the dollar headed for its best week since May, but gold is poised for a weekly advance on continuing concerns about the pandemic and its effect on the global economy.
U.S. consumer prices increased solidly in August, for the third straight month, but the labor market will likely keep inflation suppressed as the economy recovers from the Covid-19 recession. The consumer price index rose 0.4% last month, per the Labor Department, while it advanced 0.6% in June and July after declining in the prior three months.
Gold futures rose 0.5% Thursday to settle at $1,964.30 an ounce on Comex. The December contract increased 1.6% this week through Thursday. U.S. financial markets were closed Monday for the Labor Day holiday. Currently, the December contract is $1,958.70 and the DG spot price is $1,952.20.
The yellow metal jumped Thursday after the European Central Bank kept is monetary policy unchanged and U.S. initial jobless claims held at high levels, casting doubt on the likelihood of a quick recovery from the coronavirus pandemic.
Gold is still up more than $400 — or 29% — so far this year as investors have flocked to gold as a hedge against uncertainty as the coronavirus pandemic has worsened and threatened the economy.
The virus has killed more than 908,000 people worldwide and sickened 28.1 million. About 23% of the cases — and 21% of the deaths — are in the U.S. The country has 6.4 million cases, more than any other nation.
Investors will be watching for signals about the long-term state of the economy from Federal Reserve policy makers, who are meeting next week. The economic impact of the coronavirus pandemic and associated lockdowns has cost millions of Americans their jobs.
U.S. initial jobless claims were unchanged at 884,000 last week, while continuing claims for the week ended Aug. 29 jumped to 13.385 million. Last week’s figures were higher than economists anticipated, signaling that the labor market is stalling.
Meanwhile Senate Democrats blocked Republicans’ pared-down stimulus relief bill in a vote Thursday, making further economic stimulus questionable before the November election. Economic stimulus measures are typically bullish for gold.
Silver futures rose 0.8% Thursday to settle at $27.29 an ounce on Comex. The December contract gained 2.2% this week through Thursday. The most active contract gained 18% in August after soaring 30% in July. At the time of this posting, the December contract is $27.160 an ounce and the DG spot price is $26.98.
Spot palladium increased 1% Thursday to $2,342.50 an ounce, but is down 0.4% so far this It rallied 7.6% last month. Spot platinum advanced 1.9% Thursday to $944.60 an ounce and increased 4.4% so far this week. It increased 3.5% in August. Currently, the DG spot price for platinum is $942.60, while palladium is $2,330.20.
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