Gold steady on strong dollar, concerns sparked by comments from Treasury Secretary Janet Yellen about higher U.S. interest rates. Meanwhile, palladium climbed to a new record.
The dollar traded near a two-week high, take a bit of shine off gold’s attraction. Comments from U.S. Treasury Secretary Janet Yellen on interest rates also pressured the precious metal, but the worsening global coronavirus pandemic has created uncertainty that has put a floor under prices.
Front-month gold futures fell 0.9% Tuesday to settle at $1,776.00 an ounce on Comex, though the July contract is up 0.5% so far this week. Futures advanced 3% in April after dropping in January, February and March. Gold climbed $372 — or 24% — in 2020 because of uncertainty about the economy and the pandemic. Currently, the June contract is up $4.80 an ounce to $1,780.80 and the DG spot price is $1,780.70.
Spot palladium gained 0.3% to $2,996.50 an ounce and is up 1% so far this week. The metal jumped 12% last month amid strong industrial demand. Palladium also rose in February and March. It rallied 26% in 2020. The DG spot price is currently up $3.90 an ounce to $3,001.50.
Interest rates may have to increase to keep growth from surging after trillions of dollars of stimulus have been poured into the economy, Yellen said at a seminar presented Tuesday by the Atlantic. She later qualified the statement saying she wasn’t trying to influence the Federal Reserve’s decision. Interest rate hikes have historically been considered bearish for gold.
“It may be that interest rates will have to rise somewhat to make sure the economy doesn’t overheat,” she said at the Atlantic seminar. “Even though the additional spending is relatively small relative to the size of the economy, it could cause some very modest increases in interest rates.”
Gold shrugged off this morning’s employment data. Private payrolls grew by 742,000 in April, according to a report from ADP. While that is was well above March’s 565,000 new jobs, it is well short of the forecasted 800,000 number.
Leisure and hospitality showed the biggest gains as the nation’s restaurants and theatres emerge from the pandemic’s shadow. Manufacturing and construction also had a strong month.
In upcoming economic news, investors are awaiting the closely watched monthly jobs report for April, which is due out Friday. The day before, the U.S. will release its initial jobless claims report for last week. Applications for new unemployment benefits fell to another pandemic-era low in the last report.
Meanwhile, India continues to struggle to contain a surge in coronavirus cases and deaths, with close to 400,000 cases a day. India’s delegation to the Group of Seven foreign ministers’ meeting this week is self isolating after two members tested positive for COVID-19.
The COVID-19 virus has killed almost 3.23 million people worldwide and sickened almost 154.4 million. About 21% of the cases — and 18% of the deaths — are in the U.S. The country has about 32.5 million cases, more than any other nation, though its proportion of both new cases and deaths has been declining as the vaccination effort becomes more widespread and other parts of the world have outbreaks.
Front-month silver futures fell 1.5% Tuesday to settle at $26.56 an ounce on Comex. The July contract advanced 2.7% in the first two days of the week. Silver gained 5.5% in April after dropping in February and March. It increased 47% in 2020. The July contract is currently down $0.028 an ounce to $26.530 and the DG spot price is $26.43.
Spot platinum dropped 0.3% Tuesday $1,237.00 an ounce, but is up 2.6% so far this week. Platinum increased 0.8% in April after trading flat in March. The autocatalyst metal rose 11% in 2020. Currently, the DG spot price is down $4.60 to $1,231.20.
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