Gold steady near $1,800 after rising over $1,807 early Wednesday as an equities selloff in China triggered a flight to quality assets and investors awaited a statement at the end of today’s U.S. Federal Reserve’s policy meeting for further direction.
U.S. Treasurys strengthened and the dollar weakened, keeping gold in a tight range above the psychological $1,800 an ounce threshold. Worsening signals on the global pandemic abounded and made the yellow metal more attractive as a hedge against uncertainty.
December gold futures rose 60 cents Tuesday to settle at $1,804.00 an ounce on Comex. The front-month contract, which rolled to December last week, slipped 0.1% in the first two days of the week. But with prices above $1,800, gold is still trading near a three-and-a-half month high. The precious metal has increased 1.8% 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 4.8% so far in 2021. The December contract is currently down $0.90 (-0.05%) an ounce to $1,803.10 and the DG spot price is $1,800.40.
Investors were looking to the Fed’s policy announcement for indications on whether the central bank will tighten its loose monetary policy to combat rising inflation. Gold is a traditional hedge against inflation. Meanwhile, Chinese shares fell on a regulatory crackdown by Beijing.
Consumer confidence unexpectedly rose for a sixth month in July data released Tuesday, signaling that businesses were growing more confident in the recovery. Other data released Tuesday showed durable goods orders rose in June and home prices broke records in May.
But the delta variant of the coronavirus has since extended its spread around the world, spurring the U.S. Centers for Disease Control and Prevention to reimpose masking guidelines Tuesday for much of the country, including those who have been vaccinated. This heightened fears that the pandemic isn’t over and a new blow to the economy could be coming.
In addition to the pandemic and the Fed, investors will be closely watching for data on second-quarter U.S. GDP and weekly initial jobless claims on Thursday and core inflation and consumer spending on Friday.
September silver futures dropped 2.6% Tuesday to settle at $24.65 an ounce on Comex. The front-month contract lost 2.3% in the first two days of the week. The metal is down 5.9% 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 6.7% so far this year. Silver prices are tied to industrial demand, which could taper if lockdowns are reinstated and dampen manufacturing. The September contract is up $0.121 (+0.49%) to $24.770 an ounce and the DG spot price is $24.80.
Spot palladium decreased 2.5% Tuesday to $2,624.50 an ounce and lost 2.2% so far this week. It’s down 6% in July and up 7.1% so far in 2021. Currently, the DG spot price is up $7.30 an ounce to $2,629.00.
Spot platinum retreated 1.6% Tuesday to $1,060.30 an ounce and fell 0.5% so far this week. The autocatalyst is down 1.9% in July and 1.2% in 2021. The DG spot price is currently down $0.80 an ounce to $1,057.70.
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