Gold Up On Easing Treasury Yields

Gold Up On Easing Treasury Yields

Gold up on easing treasury yields trading near a seven-week high as safe-haven investors sought refuge in the yellow metal amid declines in yields and equities.

Gold reasserted its traditional role as a hedge against inflation — which is anticipated as a result of central bank stimulus measures in response to the pandemic. Much of this trade had gone to Treasurys and the dollar in recent months at the expense of gold. This morning, 10-year U.S. Treasury yields dropped below 1.6%.

Gold added to its luster as an alternate investment as global equities continued their slide amid mounting global cases of COVID-19 that renewed concern about the economic impact of the pandemic. The Standard & Poor’s 500 Index reached an all-time high earlier in the week.

Front-month gold futures rose 0.4% Tuesday to $1,778.40 an ounce on Comex. The June contract is down 0.1% so far this week after rallying for two consecutive weeks. Futures are up 3.7% so far this month after dropping in January, February and March. Gold climbed $372 — or 24% — in 2020 because of uncertainty about the economy and the pandemic. The June contract is up $6.10 an ounce currently at $1,784.50 and the DG spot price is $1,788.20.

The metal was poised to test technical resistance at the 100-day moving average near $1,802 an ounce, Reuters reported.

Investors are awaiting a monetary policy decision from the European Central Bank on Thursday as well as the bank’s commentary on the state of the economy. The ECB is widely expected to keep rates unchanged.

The U.S. Federal Reserve and other central banks have committed to maintaining an accommodative monetary policy until the economic crisis triggered by the COVID-19 pandemic is over. The Fed has a policy meeting scheduled for next week.

Investors will also be watching for the release of U.S. weekly initial jobless claims on Thursday. The report released last week showed that applications for unemployment benefits dropped to the lowest level since the pandemic began.

The COVID-19 virus has killed more than 3.04 million people worldwide and sickened more than 142.6 million. About 22% of the cases — and 19% of the deaths — are in the U.S. The country has almost 31.8 million cases, more than any other nation.

The World Health Organization reported Tuesday that coronavirus cases are rising in all regions except Europe.

May silver futures were little changed at $25.84 an ounce on Comex. The contract lost 1% in the first two days of the week. Silver is up 5.3% in April after dropping in February and March. It gained 47% in 2020. The May contract is currently up $0.250 an ounce to $26.090 and the DG spot price is $26.13.

Spot platinum retreated 1.3% Tuesday to $1,197.20 an ounce and lost 0.8% in the first two days of the week. Platinum is up 0.1% in April after trading flat in March. The autocatalyst metal rose 11% in 2020. Currently, the DG spot price for platinum is slight down, $2.30 an ounce to $1,199.00

Spot palladium dropped 2% Tuesday to $2,777.00 an ounce and fell 0.8% in the first two days of the week. Palladium is up 5.3% this month after rising in February and March. It rallied 26% in 2020. The DG spot price is currently up over $44 an ounce to $2,821.50.


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