Gold steady early Monday, sticking above the key psychological level of $1,800 an ounce, as the delta variant of the coronavirus continued to spread, disrupting economic activity around the world and suppressing the U.S. dollar.
The United States is heading in “the wrong direction” on and in an “unnecessary predicament” of rising COVID-19 cases spurred by delta and people who have hesitated from getting or declined the vaccines, Dr. Anthony Fauci said Sunday on CNN’s “State of the Union” program. The U.S. Centers for Disease Control and Prevention are actively considering reimposing guidelines that even vaccinated people should wear masks, he said.
Investors were awaiting a policy announcement from the U.S. Federal Reserve on Wednesday for indications on whether the central bank will tighten its loose monetary policy to combat rising inflation. Gold is a traditional hedge against inflation. Bond yields weakened, supporting the yellow metal. The dollar was steady near a three-and-a-half month high, keeping a lid on prices. A stronger dollar is typically bearish for gold.
December gold futures fell 0.5% last week to settle at $1,805.90 an ounce on Comex, the first weekly decline in five weeks. The front-month contract, which rolled to December last week, slipped 0.2% Friday. But with prices above $1,800, gold is still trading near a three-and-a-half month high. The December contract is currently up $0.80 (+0.04%) an ounce to $1806.70 and the DG spot price is $1802.80.
The precious metal has increased 1.9% so far in July. It fell 7% in June in the worst month since November 2016 after advancing 7.8% in May, the best month for the precious metal since July 2020. Gold climbed $372 — or 24% — in 2020 because of uncertainty about the economy and the pandemic and is down 4.7% so far in 2021.
Cases of the delta variant of the coronavirus are climbing around the world and have raised fears that the pandemic isn’t yet over, driving some investors to hedge against uncertainty. The more infectious strain of COVID-19 is delaying reopenings and triggering new lockdowns and making investors nervous about another blow to the economy.
In addition to the pandemic and the Fed, investors will be closely watching for economic releases this week. They include durable goods orders, consumer confidence and the S&P Case-Shiller home price index on Tuesday; second-quarter U.S. GDP and weekly initial jobless claims on Thursday; and core inflation and consumer spending data on Friday.
September silver futures dropped 2.2% last week to settle at $25.23 an ounce on Comex. The front-month contract lost 0.6% Friday. The metal is down 3.7% so far this month. Silver fell 6.5% in June after rallying 8.3% in May. The metal rose 47% in 2020 and is down 4.5% so far this year. Silver price are tied to industrial demand, which could taper if lockdowns are reinstated and dampen manufacturing. The September contract is currently up $0.057 (+0.23%) an ounce to $23.290 and the DG spot price is $25.32.
Spot palladium increased 1% last week to $2,682.50 an ounce, but lost 1.1% Friday. It’s down 4% in July and up 9.5% so far in 2021. Currently, the DG spot price is up $24.60 an ounce to $2,702.00.
Spot platinum retreated 4.5% last week to $1,066.00 an ounce and fell 2.9% Friday. It’s down 1.4% so far in July. The autocatalyst metal is down 0.7% in 2021. The DG spot price is currently up $5.10 an ounce to $1,075.50.
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