Gold sticks above $1900, firming its position beyond that psychological threshold as U.S. Treasury yields fell and Federal Reserve officials signaled that the central bank’s monetary policy would continue to be accommodative.
The yellow metal rose above $1,900 yesterday — for the first time since January — and erased all of 2021’s losses — as Treasury yields traded near a two-week low, boosting gold as an alternative investment.
Fed Vice Chairman Richard Clarida said Tuesday that the Fed would be able to curb inflation without derailing the economic recovery, though he acknowledged that policy makers may soon begin to talk about rolling back asset purchases. San Francisco Fed President Mary Daly also told CNBC Tuesday that the central bank is “talking about tapering $120 billion in monthly asset purchases designed to spur economic growth, but added, “I want to make sure that everyone knows it’s not about doing anything now.”
Gold is a traditional hedge against inflation, which many economists are concerned about after central banks around the world have poured stimulus funds into the global economy, which was hard hit by the pandemic.
August gold futures rose 0.7% Tuesday to settle at $1,900.50 an ounce on Comex. The front-month contract is up 1.2% so far this week and 7.5% this month. It gained 3% in April and dropped in January, February and March. Gold climbed $372 — or 24% — in 2020 because of uncertainty about the economy and the pandemic. Currently, the August contract is up $6.70 an ounce to $1,907.20 and the DG spot price is $1,904.60.
The COVID-19 virus has killed almost 3.49 million people worldwide and sickened 167.9 million. About 20% of the cases — and 17% of the deaths — are in the U.S. The country almost 33.2 million cases, more than any other nation, though its proportion of both new cases and deaths has been declining as more Americans are vaccinated and other countries’ outbreaks worsen.
In upcoming economic news, U.S. initial jobless claims as well as GDP, durable goods and pending home sales data are due out on Thursday. U.S. weekly initial jobless claims dropped to a pandemic-era low of 444,000 in the report released last week.
Front-month silver futures rose 0.5% Tuesday to settle at $28.06 an ounce on Comex. The July contract gained 2.1% in the first two days of the week. Silver is up 8.4% so far this month after gaining 5.5% in April and dropping in February and March. It increased 47% in 2020. The July contract is currently slightly down by $0.016 an ounce to $28.040 and the DG spot price is $27.87.
Spot palladium increased 1.5% Tuesday $2,793.00 an ounce and is up $1 so far this week. The metal is down 5.9% so far this month after jumping 12% in April amid strong industrial demand. Palladium also rose in February and March. It rallied 26% in 2020. Currently, the DG spot price is down $22.20 an ounce to $2,775.00.
Spot platinum rallied 1.6% Tuesday to $1,203.40 an ounce and is up 2.3% so far this week. Platinum has increased 2.3% so far this month after gaining 0.8% in April after trading flat in March. The autocatalyst metal rose 11% in 2020. The DG spot price is up $4.50 an ounce to $1,206.50.
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