Gold up Monday as investors focus on renewed stimulus hopes, boosting the yellow metal over $20 an ounce. The yellow metal’s attraction as an inflation hedge counterbalanced the equities rally and rising dollar that were also driven by the potential for a substantial U.S. relief package.
The dollar rebounded early Monday after losing ground Friday. The U.S. currency climbed to its highest level in more than two months on Thursday, and gold tumbled to its lowest price in more than two months the same day. A stronger dollar is typically bearish for gold.
Meanwhile, House Democrats are moving to fast-track U.S. President Joe Biden’s $1.9 trillion pandemic stimulus bill, with the goal of a floor vote by the end of the month. Stimulus measures are considered bullish for gold because the metal operates as a hedge against inflation and currency debasement which can be triggered by efforts to support the economy.
April gold futures slid 2% last week to $1,813.00 an ounce on Comex, though a 1.2% rally on Friday curbed the weekly decline. Bullion fell 2.4% in January. Gold climbed $372 — or 24% — in 2020 because of uncertainty about the economy and the coronavirus pandemic. Currently , the April contract is up over $20 an ounce to $1,833.10 and the DG spot price is $1,834.20.
Details of the stimulus bill are still being worked out — and Republicans are balking at the measure’s size. The latest proposal involves sending up to $3,600 per child to Americans as part of efforts to combat child poverty rates.
The outlook for the economy worsened on Friday after the January jobs report showed signs that the labor market is stalling, adding urgency to stimulus efforts on the part of proponents of the legislation. U.S. employers added just 49,000 jobs in January, with just 6,000 of them in the private sector. Almost 10 million Americans are unemployed, with pandemic lockdowns triggering the jump in the first part of last year.
The COVID-19 virus has killed almost 2.32 million people worldwide and sickened more than 106 million. About 25% of the cases — and 20% of the deaths — are in the U.S. The country has almost 27 million cases, more than any other nation.
Investors will be looking to reports on U.S. inflation in January, due Wednesday, and weekly initial jobless claims, due Thursday, for further signals on the state of the economy.
Volume in silver futures edged higher at the end of last week after seemingly returning to normal levels in midweek after a wave of speculation sent the price above $30 an ounce on Comex early in the week.
Front-month silver futures rose 0.4% last week to settle Friday at $27.02 an ounce on Comex. The March contract rallied 3% on Friday after dropping 2.5% in the first four days of last week. The contract rallied 16% between Jan. 28 and Feb. 1, reaching an eight-year high. Silver futures increased 1.9% in January and 47% in 2020. Currently, the March contract is up over $.40 an ounce to $27.475 and the DG spot price is $27.55.
Spot palladium increased 5.7% last week to $2,359.00 an ounce after rising 2.2% Friday. It plummeted 9% in January after rallying 26% in 2020. The DG spot price is currently up over $15 an ounce to $2,372.50.
Spot platinum rose 4.8% last week to $1,131.00 an ounce after rallying 2.4% Friday. It rose 0.5% in January and 11% in 2020. Currently, the DG spot price is up over $48 an ounce to $1,177.30.
Disclaimer: This editorial has been prepared by Dillon Gage Metals for information and thought-provoking purposes only and does not purport to predict or forecast actual results. This editorial opinion is not to be construed as investment advice or as a recommendation regarding any particular security, commodity or course of action. Opinions expressed herein cannot be attributable to Dillon Gage. Reasonable people may disagree about the events discussed or opinions expressed herein. In the event any of the assumptions used herein do not come to fruition, results are likely to vary substantially. It is not a solicitation or advice to make any exchange in commodities, securities or other financial instruments. No part of this editorial may be reproduced in any manner, in whole or in part, without the prior written permission of Dillon Gage Metals. Dillon Gage Metals shall not have any liability for any damages of any kind whatsoever relating to this editorial. You should consult your advisers with respect to these areas. By posting this editorial, you acknowledge, understand and accept this disclaimer.