Gold Steady on Coronavirus Fears

Gold Steady on Coronavirus Fears

Gold steady on coronavirus fears, little changed early Friday as talk of a second wave of the coronavirus pandemic sent investors to the yellow metal as a safe haven, while a stronger dollar kept a lid on prices.

Pandemic concerns resurged amid indications that China — where the first cases of the coronavirus were detected months ago — was reporting a new outbreak after largely returning to normal. Meanwhile, cities, states and countries around the world continued to open, and cases mounted. The virus’s spread also boosted the greenback, which headed for a weekly gain. Typically, when the dollar rises, gold weakens.

This morning, gold is untouched by the glimmer of optimism from global stock markets, with U.S. markets set to open in the positive this morning heading for a winning week. One thing to watch for, today is a quadruple-witching day for U.S. investors as stocks, stock options, options on futures and stock index futures contracts all expire. This combination happens once every quarter and frequently drives market turbulence. “Expirations tend to be volatile by their nature, and I would suspect this go around will likely be no exception,” said Art Hogan, chief market strategist at National Securities Corporation, to MarketWatch.

August gold futures fell 0.3% Thursday to $1,731.10 an ounce on Comex. Futures slipped 0.4%s in the first four days of this week. The yellow metal had its best week since April last week. Currently, the August contract is at $1,745.60, while the DG spot price is $1,737.80.

Gold must breach $1,825 an ounce to confirm a new bullish trend or fall below $1,630 to confirm a new bearish trend, according to a technical analysis Thursday from FX Empire.

The economic impact of the lockdowns triggered by the virus may take years to play out, Cleveland Federal Reserve President Loretta Mester told reporters Wednesday. The economy has a “long road” to recovery, and the Fed will likely have to maintain easy monetary policy into 2023, she said.

The virus known as COVID-19 has killed more than 453,000 people worldwide and sickened 8.47 million. About 26% of the cases — and the deaths — are in the U.S. The country has almost 2.2 million cases — more than any other nation.

Meanwhile, another 1.5 million Americans filed first-time claims for unemployment benefits last week, according to data released Thursday by the Labor Department. The figure was more than the 1.3 million expected, and it was the 13th straight week that claims have been above 1 million.

Data on the U.S. current account deficit for the first quarter is set for release Friday.

Front-month silver futures dropped 0.6% Thursday to settle at $17.67 an ounce on Comex as the most active month rolled to September from July. Front-month futures advanced 1.1% in the first four days of the week. Currently, the July contract is at $17.840 with the DG spot price at $17.67.

Spot palladium fell 0.9% Thursday to $1,934.60 an ounce and is down 0.8% for the week to date. Spot platinum decreased 2.1% Thursday to $813.30 an ounce and lost 0.1% for the first four days of the week. Currently, the DG spot price for platinum is $831.10 and palladium is $1915.10

 

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