Gold was steady near the $1,800 an ounce threshold early Wednesday amid strength in the dollar and as investors awaited signals from central bankers about stimulus tapering measures.
Futures settled below $1,800 Tuesday for the first time since Aug. 26 as the dollar traded near a one-week high and Treasury yields increased. The European Central Bank’s Governing Council is scheduled to announce a policy decision Thursday. The Federal Reserve’s next policy meeting will be held in two weeks.
December gold futures fell 1.9% Tuesday to settle at $1,798.50 an ounce on Comex. The precious metal is down 1.1% so far this month. It gained just 90 cents in August. The yellow metal climbed $372 – or 24% – in 2020 because of uncertainty about the economy and the pandemic and is down 5.1% so far in 2021. The December contract is currently down $1.10 (-0.06%) an ounce to $1,797.40 and the DG spot price $1,797.20.
Investors will be closely watching for comments from central bankers regarding the pace of tapering efforts. Dallas Fed President Robert Kaplan is scheduled to hold a town hall meeting Wednesday, and ECB President Christine Lagarde will hold a news conference after the central bank’s rate decision Thursday.
U.S. President Joe Biden is also widely expected to decide this week whether to reappoint Fed Chairman Jerome Powell to a second term, a decision that may affect the pace of tapering, interest rate increases and the economic recovery. A change in the pace of the asset purchases — and any change in interest rates — would likely be bearish for gold, which becomes a more attractive investment when rates are low.
In economic news, the Fed will release its Beige Book today at 2 pm Eastern, in which each of the 12 regional banks provides a snapshot of economic conditions. China’s producer price index and consumer price index are due out Thursday, as are U.S. initial jobless claims. The U.S. producer price index comes out Friday.
Investors will also keep a close eye on the pace of the global coronavirus pandemic. Biden is planning an address to the nation Thursday to lay out a “six-pronged strategy” to combat COVID-19 this fall, according to the White House.
December silver futures fell 1.7% Tuesday, settling at $24.37 an ounce on Comex. The front-month contract has increased 1.5% so far this month after losing 6% in August, its third consecutive monthly decline. The metal rose 47% in 2020 and is down 7.7% so far this year. Silver prices are tied to industrial demand, which could taper if lockdowns are reinstated and dampen manufacturing. The December contract is down $0.118 (-0.48%) an ounce, currently, to $24.255 while the DG spot price is $24.30.
Spot palladium traded at $2,385.00 an ounce, near a two-week low. It fell 7% in August and is down 2.7% so far in 2021. Currently, the DG spot price is down $18.00 an ounce to $2,360.50.
Spot platinum traded at $1,005.00 an ounce, also near the lowest level in two weeks. It’s down 2% so far this month, extending August’s 3.1% losses. It’s down 6.4% in 2021. The DG spot price is currently down $4.90 an ounce to $1,002.00.
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