Gold slips on new virus concern that has boosted the dollar as investors fear newly roiling markets and more forced restrictions. The Dow fell 200 points at the opening bell this morning.
This new coronavirus variant was first identified in England and is feared to be much more virulent, but there are many questions about the strain. The U.K. imposed the strictest lockdowns since March and British travelers are now being cut off from much of Europe and other parts of the world as countries imposed restrictions on travel from the UK.
Gold had risen to the highest level in a month and a half earlier Monday after U.S. lawmakers reached an agreement on a long-awaited stimulus package to bolster an economy still reeling from pandemic restrictions.
The reached Sunday afternoon for an almost $900 billion emergency relief package comes after months of wrangling and deadlocked talks. A vote is expected as soon as Monday. The agreement — seen as bullish for gold, as are other stimulus measures — is expected to direct hundreds of billions of dollars in aid to out-of-work Americans, struggling businesses and other parts of the economy. The agreement was announced be Senate Majority Leader Mitch McConnell and Minority Leader Chuck Schumer.
Front-month gold futures rose 2.5% last week to settle at $1,888.90 an ounce on Comex, though the February contract slipped $1.50 on Friday. Gold is up more than $350 — or 24% — so far this year as investors have flocked to the metal because of uncertainty from the coronavirus pandemic and the economy. The metal fell 5.3% in November. The February contract is currently down less that $5 an ounce to $1,884.80, and the DG spot price is $1,882.70.
Futures settled at the highest level in almost six weeks on Thursday, just shy of the $1,900 an ounce threshold it left behind in November. The stimulus agreement may give gold the momentum to close above $1,900 before the end of the year, and possibly as high as $1,925, Stephen Innes, chief global market strategist at financial services firm Axi, told Reuters.
Speculators increased their bullish positions in Comex gold and silver contracts in the week that ended Dec. 15, according to the weekly Commitments of Traders report from the U.S. Commodity Futures Trading Commission, which was released Friday.
The COVID-19 virus has killed more than 1.69 million people worldwide and sickened more than 76.8 million. About 23% of the cases — and 19% of the deaths — are in the U.S. The country has about 17.8 million cases, more than any other nation.
But a second vaccine received emergency authorization late last week in the U.S. and is expected to roll out to the states in the first part of this week. The Moderna vaccine joins one by Pfizer, approved the week before.
Economic news was expected to be sparse heading into the Christmas holiday, but consumer confidence data was due out Tuesday, and initial jobless claims Wednesday.
Front-month silver futures rose 8.1% last week to settle at $26.03 an ounce on Comex, though the March contract dropped 0.6% Friday. Currently, the March contract is slightly up $0.027 to $26.060 an ounce, and the DG spot price is $26.17.
Spot palladium gained 1.8% last week to $2,379.00 an ounce and increased 1.3% Friday. Spot platinum rose 2.2% last week to $1,043.70 an ounce, but lost 0.7% Friday. The DG spot price for palladium is currently down over $45 an ounce to $2,327.50, while platinum is down over $35 an ounce to $1,009.90.
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