Gold Slips on Treasury Yields

Gold Slips on Treasury Yields

Gold slips back under $1,800 on Treasury yields this morning. The 10-year U.S. Treasury yield hit a high of 1.42%, its highest since February 2020, in turn U.S. stocks fell with the Dow off by over 100 points just after the opening bell.

The yellow metal was steady near a one-week high earlier Wednesday, propped up by a weaker dollar and comments Tuesday by Federal Reserve Chairman Jerome Powell before the Senate Banking Committee. Powell said the recovery is “uneven and far from complete” and still requires accommodative monetary policy. Stimulus actions are considered bullish for gold, because they can be inflationary, and gold is a traditional hedge against inflation. Powell is set to testify before a House committee Wednesday.

April gold futures slipped 0.1% Tuesday to settle at $1,805.90 an ounce on Comex. Prices are up 1.6% so far this week after dropping 2.5% last week. Bullion has retreated 2.4% so far in February after declining 2.4% in January. Gold climbed $372 — or 24% — in 2020 because of uncertainty about the economy and the pandemic. The April contract is down by $20 an ounce to $1,785.90 and the DG spot price is $1,787.80.

Holdings in SPDR Gold Trust fell 0.4% Tuesday to 1,110.44 metric tons, Reuters reported.

Gold is also getting support from efforts to pass President Joe Biden’s $1.9 trillion economic stimulus measure, designed as a shot in the arm to an economy still reeling from the pandemic. The House of Representatives is set to vote on the measure Friday.

The COVID-19 virus has killed more than 2.48 million people worldwide and sickened more than 112 million. About 25% of the cases — and 20% of the deaths — are in the U.S. The country has about 28.3 million cases, more than any other nation.

In addition to Powell’s testimony and the stimulus bill, investors will be watching for the release Thursday of U.S. weekly initial jobless claims and fourth quarter GDP data. Friday will bring reports on inflation and consumer spending.

May silver futures declined 1.4% Tuesday to $27.74 an ounce on Comex. They are up 1.7% so far this week. The metal is up 3.1% so far this month after gaining 1.9% in January and 47% in 2020. The front-month contract rallied 16% between Jan. 28 and Feb. 1. The May contract is currently down by $0.292 an ounce to $27.520 and the DG spot price is $27.48.

Spot platinum slipped 3.4% Tuesday to $1,238.90 an ounce and is down 3.2% this week. It has gained about 15% so far this month amid forecasts for higher demand and tighter supplies and reached six-year highs last week. The autocatalyst metal advanced 0.5% in January and 11% in 2020. Currently the DG spot price is up over $10 an ounce to $1,247.90.

Spot palladium decreased 1.9% Tuesday to $2,367.50 an ounce and is down 0.8% so far this week. It’s up 6.2% in February after plummeting 9% in January and rallying 26% in 2020. The DG spot price is currently up just over $2 an ounce to $2,362.50.


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