Gold Steady Ahead of ISM Numbers

Gold Steady Ahead of ISM

Gold steady ahead of ISM numbers as investors awaited the release of U.S. manufacturing data for March for signs of how badly the coronavirus has affected the world’s largest economy. The yellow metal didn’t react when the ADP employment numbers showed a loss of 27,000 beating the forecast loss of 150,000 jobs.

Gold rose as speculation mounted that central banks would take further action to support the global economy. The U.S. Federal Reserve on Tuesday launched a new lending facility for foreign central banks.

Three of the world’s largest gold refineries said they have suspended production in Switzerland for at least a week after the government shuttered nonessential businesses, and Russia said it would stop gold purchases from April 1, Reuters reported.

The most-active June gold futures contract fell 2.8% Tuesday to settle at $1,596.60 an ounce on Comex. It decreased 3.5% in the first two days of the week after rising 11% last week. The yellow metal advanced 1.9% in March and 4.8% in the first quarter. Currently, the June contract is at $1,585.90, while the DG spot is at $1,583.30.

U.S. President Donald Trump and his coronavirus task force on Tuesday predicted a best-case scenario in which 100,000 to 240,000 people died in the U.S. He extended mitigation efforts for another 30 days, including guidelines for social distancing.

“This is going to be a very painful — very, very painful two weeks,” he said at a news conference Tuesday evening. He said the country wouldn’t begin to return to normal until after April.

Gold and other precious metals prices have gotten a boost in recent weeks as investors sought a hedge against uncertainty as the broader market plummeted, but the metals have declined as traders cashed out of their positions to cover margin calls in other assets. Then came last week’s short squeeze in gold, when traders who had bet on market declines were forced to purchase gold to make good on maturing contracts.

In economic news, traders will look to the weekly jobless claims report on Thursday and the key March unemployment report on Friday for signals on the economy.

Asian manufacturing data released Wednesday showed that factories contracted further in March almost everywhere but China. The Jibun Bank Japan index and South Korea’s PMI posted their worst readings since the global financial crisis more than 10 years ago, Bloomberg reported. But China’s Caixin Media and HIS Market PMI rose to 50.1 in March from 40.3 in February, reflecting employees’ return to work after the worst of the coronavirus-related shutdowns.

The virus, known as COVID-19, has killed more than 42,000 people worldwide and sickened almost 859,000. Almost 22% of the cases are now in the U.S., though just 9.1% of the deaths. The U.S. has more cases than any other country. The virus is a WHO-designated pandemic.

Palladium continued its rally because of supply crunch in South Africa, a major producer of the autocatalyst, because of coronavirus-related lockdowns. Spot palladium gained 2.1% Tuesday to $2,400 an ounce and advanced 3.3% the first two days of this week after soaring 38% last week. It decreased 8.3% in March but surged 23% in the first quarter. Currently, the DG spot price is $2,251.00

Spot platinum slipped 0.2% Tuesday to $729.80 an ounce and is down 2.4% in the first two days of the week after climbing 21% last week. It dropped 16% in March and 25% in the first quarter. The current DG spot price is $717.90

May silver futures edged up 0.2% Tuesday to settle at $14.16 an ounce on Comex. They declined 2.6% in the first two days of this week after rising 17% last week. Silver tumbled 14% in March and 21% in the first quarter. The May contract is currently at $14.01, while the DG spot price is $13.99.

 

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