Gold Steady Near $1,700

Gold Steady Near $1,700

Gold steady near $1,700 an ounce early Wednesday as continued concern about the novel coronavirus and its effect on the economy boosted the yellow metal, but a strong dollar kept prices from surging.

The world probably entered a deep global recession in March as the spread of the novel coronavirus locked people down around the world, Bloomberg reported. The World Trade Organization is set to release a new global-trade forecast Wednesday.

“In some respects the picture today looks bleaker than after the 2008-2009 crisis,” WTO Director-General Roberto Azevedo told the agency in an interview. The outlook may project “significantly larger drops” than the 12.6% drop in global trade and 2% economic contraction seen in 2009, he said.

The virus, known as COVID-19, has killed more than 82,000 people worldwide and sickened more than 1.43 million. About 28% of the cases are now in the U.S., though just 16% of the deaths. The U.S. has more cases than any other country. The virus is a WHO-designated pandemic.

Investors have fled to gold as a safe haven from the economic uncertainty caused by the novel coronavirus, but a strong dollar and rallying equities put a lid on potential gains. Meanwhile, a supply squeeze as gold refineries shut down gave the precious metal a boost, while traders cashing out of their gold positions to cover margin calls in other assets have pressured prices.

The most-active June gold futures contract fell 0.6% Tuesday to settle at $1,683.70 an ounce on Comex. The metal gained 2.3% in the first two days of this week. There will be no settlement on Comex on Friday because of the Good Friday holiday. The June contract is currently at $1,686.70, while the DG spot price is $1,664.60.

The Standard & Poor’s 500 Index briefly touched a 20% gain from its March low on Tuesday.

Deaths from COVID-19 hit a new high Tuesday in New York, but the number of hospitalizations slowed, offering a glimmer of hope that social distancing efforts were working. Meanwhile, China lifted the lockdown on Wuhan, the place where the virus originated, after 11 weeks.

May silver futures rose 2.1% Tuesday to settle at $15.48 an ounce on Comex. The metal rallied 6.8% in the first two days of this week. Currently, the May contract is down a touch at $15.385, while the DG spot price is $15.21.

Spot palladium rose 1.2% Tuesday to $2,230.10 an ounce and was up 1.9% in the first two days of this week. DG spot price for palladium is currently $2,200.00. Spot platinum increased 1.3% Tuesday to $753.10 an ounce and was advanced 3.4% in the first two days of this week. Currently, the DG spot price is $751.40.

 

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