Gold Slumps On Treasury Yields

Gold Slumps On Treasury Yields

Gold slumps on strong Treasury yields and positive economic news, however the platinum group metals look to have their best month since November.

Benchmark Treasury yields spiked to a one-year high and the dollar advanced, taking a bit of the shine off of gold. All three assets are traditional hedges against inflation, however, which kept a floor under gold prices.

Meanwhile, this morning’s U.S. economic data shows that while personal income for January leapt up 10%, higher than the Dow’s 9.5% forecast, inflation remains low. The Core PCE inflation is up 1.5% year over year, below the Fed’s 2% target. The rise in personal income is largely due to government stimulus checks and bolstered unemployment benefits.

April gold futures slipped 1.3% Thursday to settle at $1,775.40 an ounce on Comex. Prices are down 0.1% so far this week after dropping 2.5% last week. Bullion has retreated 4.1% 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. Currently, the April contract is down $14 an ounce to $1,760.80 and the DG spot price is $1,760.50.

Holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, fell 0.6% Thursday to its lowest level since May 2020, Reuters reported.

Gold is also getting support from efforts to pass President Joe Biden’s $1.9 trillion economic stimulus measure, which may face a vote in the House of Representatives as early as Friday. The measure is designed as a shot in the arm to an economy still reeling from the pandemic, though weekly U.S. initial jobless claims

The COVID-19 virus has killed almost 2.51 million people worldwide and sickened almost 113 million. About 25% of the cases — and 20% of the deaths — are in the U.S. The country has about 28.4 million cases, more than any other nation.

May silver futures declined 0.9% Thursday to settle at $27.69 an ounce on Comex. They are up 1.4% so far this week. The metal is up 2.9% 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 $0.70 an ounce to $26.985 and the DG spot price is $26.85.

Spot platinum slipped 1.9% Thursday to $1,238.80 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 down by over $25 an ounce to $1,206.20.

Spot palladium decreased 0.9% Thursday to $2,434.50 an ounce and is up 2% so far this week. It’s up 9.2% in February after plummeting 9% in January and rallying 26% in 2020. The DG spot price is currently off by over $60 an ounce to $2,375.50.


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