Gold Targets Best Week In 11 Years

Gold Targets Best Week In 11 Years

Gold targets best week in 11 years, despite slipping a tad overnight as investors took profits. The yellow metal inched back up this morning as the U.S. Stock Markets tank at the opening bell, with the Dow dropping 1,000 following a huge 3-day run.

Gold is on track to its best week in over a decade buoyed by record high U.S. jobless claims and ongoing uncertainty about the novel coronavirus and its impact on the global economy. It gave little reaction to this morning’s economic data which showed personal income for February expanding to .6%, beating the .4% expectation. While consumers spending met expectations, increasing .2% last month. These numbers do not reflect the changes that have hit the economy since the advance of COVID-19.

The most-active gold futures contract, which rolled to June from April late last week, rose 12% in the first four days of this week to settle at $1,660.30 an ounce Thursday on Comex after advancing 1.6% Thursday. June’s contract is currently at $1,551.20.

The precious metal renewed its role as a traditional hedge against geopolitical and economic uncertainty and also got a boost as investors anticipated more stimulus measures after Thursday’s unemployment report. Americans filing new applications for unemployment benefits surged to 3.28 million last week amid massive displacements because of coronavirus-related shutdowns, according to Labor Department data. The figure dwarfed the previous record of 695,000 in 1982.

The U.S. House of Representatives is expected to pass a $2.2 trillion stimulus bill Friday which was approved earlier this week by the Senate. The Federal Reserve has already reduced interest rates to almost zero, joining central banks around the world in attempts to prop up the economy.

Markets remain volatile as the number of coronavirus cases around the world climbed and more countries — and U.S. cities and states — went into lockdown. As of Thursday, the U.S. has more confirmed cases of the virus designated COVID-19 than any other country in the world.

The virus has killed more than 23,000 people worldwide and sickened more than 519,000. About 16% of the cases are now in the U.S., though just 5.2% of the deaths. The virus is a WHO-designated pandemic.

As gold approached the $1,700-an-ounce threshold — which it crossed for the first time in more than seven years last week — palladium and platinum were poised for their biggest weekly gains on record because of a supply crunch. South Africa, a major producer of both autocatalysts, is going into lockdown for 21 days because of the coronavirus and it wasn’t immediately clear whether production would be affected.

Spot palladium skyrocketed 42% in the first four days of the week to $2,339.91 an ounce. Spot platinum rallied 21% for the first four days of the week to $739.13 an ounce. Both metals slipped slightly Thursday.

May silver futures rose 19% in the first four days of the week to settle at $14.68 an ounce on Comex. The metal declined 1.3% Thursday.

 

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