Gold Aims At Weekly Gain

Gold Aims At Weekly Gain

Gold aims at weekly gain with little change early Friday, headed for the third weekly gain in a row, as the U.S. broke its record for daily coronavirus cases.

Gold slipped a tad on this morning’s U.S. economic data. Personal income fell 4.2% in May, versus the expected 6.0% drop. The Department of Commerce also released core Personal Consumption Expenditures Index numbers that revealed a small 0.1% uptick in May, after declining 0.4% in April.

Meanwhile, U.S. stock futures fell after the Fed’s annual stress test of the major banks showed some banks could get close to minimum capital levels in scenarios related to the coronavirus pandemic. Because of this, banks must suspend share repurchase programs and keep dividend payments at current levels for the third quarter.

Investors braced themselves for the potential economic impact of the worsening pandemic and turned to the yellow metal as a safe-haven investment. But profit-taking kept a lid on gains as gold futures neared the highest level in eight years and the dollar strengthened. Gains in the dollar typically weaken gold.

August gold futures slipped 0.3% Thursday to $1,770.60 an ounce on Comex and is up 1% so far this week. Holdings in SPDR Gold Trust, the world’s largest gold-backed exchange traded fund, topped seven-year highs, Reuters reported. Currently, the August contract is down a bit at $1,769.50, while the DG spot price is $1,760.40.

The virus known as COVID-19 has killed more than 489,000 people worldwide and sickened 9.61 million. About 25% of the cases — and the deaths — are in the U.S. The country has 2.42 million cases — more than any other nation.

Bank of Japan Governor Haruhiko Kuroda said Friday that a second wave of the pandemic could “considerably” impact the Japanese economy and that the bank was ready to take further stimulus measures. Economic stimulus measures by banks around the world are bullish for precious metals.

The U.S. reported more than 37,000 new cases on Thursday, with most in Florida, Texas, California and Arizona, breaching a record set two months ago, according to Johns Hopkins University data reported by Bloomberg.

The U.S. economy shrank 5% in the first quarter as the coronavirus pandemic took hold, according to Commerce Department data released Thursday. The figure was unrevised from the estimate made a month earlier. But economists warn that the April-to-June quarter is likely to be significantly worse — around 30%, according to The Associated Press.

Another 1.48 million Americans filed new applications for unemployment benefits last week, according to data released Thursday by the Labor Department. The initial jobless claims number has been above 1 million for each of the previous 14 weeks.

Silver futures gained 1.4% Thursday to settle at $18.05 an ounce on Comex. The most-active September contract added 0.2% in the first four days of the week. The September contract is currently $18.100, while the DG spot price is $17.85.

Spot palladium decreased 2.6% Thursday to $1,870.20 an ounce and declined 3.2% in the first four days of the week. Spot platinum dropped 0.8% Thursday, to $805.90 an ounce, and is down 1.7% so far for the week. Currently, DG spot price for platinum is up at $814.90 and palladium is up as well, at $1,881.80.

 

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