Gold Strong On Global Tensions

Gold Strong On Global Tensions

Gold strong on global tensions as the yellow metal’s safe haven attracts investors spooked by mounting stresses between China and the U.S., a Beijing plan for a new national security law in Hong Kong and the continued economic collapse triggered by coronavirus-related lock owns.

Equities fell, boosting precious metals as an alternate investment, after China announced plans to tighten its control on Hong Kong, which has been rocked by anti-overnment protests. The move threatened to worsen relations between China and the U.S., even as relations were already souring because of rhetoric about the handling of the coronavirus outbreak. The two superpowers were at a standoff over trade for all of last year.

Gold rallied to its highest level since 2012 on Monday as the pandemic and the economic fallout continued to worsen. Front-month gold futures slipped 1.7% Thursday to $1,721.90 an ounce on Comex’s most-active June gold futures contract. Currently,the June contract is $1734.50 and the DG spot price is $1,736.10

Economic forecasts face “a whole new level of uncertainty,” Federal Reserve Chairman Jerome Powell said Thursday, in a virtual address to a Fed conference. Much will depend on public confidence, he said.

U.S. initial jobless claims last week totaled 2.44 million, bringing the total since the pandemic began to 38.6 million, according to Labor Department data released Thursday. But the weekly figure has been lower each week since reaching a peak in late March.

Fed Vice Chairman Richard Clarida said at a different event Thursday that the Fed “will continue to act forcefully, proactively and aggressively as we deploy our toolkit … to provide critical support to the economy during this challenging time.”

Central-bank pledges of increased stimulus are typically seen as bullish for gold because the precious metal is used as a hedge against inflation. But one of Europe’s highest-profile hedge fund managers, Crispin Odey, told investors that governments may ban private gold ownership if they lose control of inflation, according to a Bloomberg report, which cited his letter.

The virus known as COVID-19 has killed almost 333,000 people worldwide and sickened 5.14 million. About 31% of the cases are in the U.S., though just 28% of the deaths. The U.S. has more cases than any other country.

July silver futures decreased 3.7% Thursday to settle at $17.36 an ounce on Comex. The metal gained 1.7% in the first four days of the week. The July contract is currently up at 17.655, while the DG spot price is $17.18.

Spot palladium retreated 5.2% Thursday to $2,090.80 an ounce, after advancing 10% in the first four days of this week. This morning, palladium has taken a tumble, currently the DG spot price is $1,973. Spot platinum fell 1.1% Thursday to $844.00 an ounce but gained 4.6% so far this week. The DG spot price is currently $846.70.

 

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