Gold Slips as Dollar Firms & Investors Await Inflation Data

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Gold Slips as Dollar Firms

Gold slips as dollar firms and investors look toward economic data on inflation due later this week. The yellow metal getting mixed support from comments made over the weekend by Treasury Secretary Janet Yellen at the Group of Seven finance ministers meeting in London.

Yellen said President Biden’s multitrillion-dollar spending plan would help the U.S. economy even if it results in inflation and high interest rates. “If we ended up with a slightly higher interest rate environment, it would actually be a plus for society’s point of view and the Fed’s point of view,” she told Bloomberg News on Sunday. Gold is a traditional hedge against inflation, but higher interest rates are typically bearish for gold.

Gold got some support Friday after the release of the key U.S. jobs report for May. It showed that the U.S. added 559,000 jobs last month but missed the consensus estimate, and the employment rate remains far below prepandemic levels. The jobless rate dropped to 5.8%, but the increase in employment hasn’t kept pace with many economists’ hopes.

August gold futures fell 0.7% last week to settle at $1,892.00 an ounce on Comex, though the front-month contract rallied 1% Friday. It advanced 7.8% last month. May was the best month for the precious metal since July. Gold gained 3% in April and dropped in January, February and March. Gold climbed $372 — or 24% — in 2020 because of uncertainty about the economy and the pandemic, though it’s little changed so far in 2021. The August contract is currently down by $3.80 an ounce to $1,888.20 and the DG spot price is $1,890.70.

Holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, rose 0.1% Friday to 1,043.16 metric tons, Reuters reported. Meanwhile, speculators raised their net long positions in Comex gold in the week ended June 1, according to the weekly Commitments of Traders report from the U.S. Commodity Futures Trading Commission.

Gold dealers in India offered the biggest discounts in 8.5 months amid COVID-19-related restrictions, and China flipped to a discount for the first time since late January, Reuters reported

The COVID-19 virus has killed about 3.73 million people worldwide and sickened around 173.2 million. About 19% of the cases — and 16% of the deaths — are in the U.S. The country has about 33.4 million cases, more than any other nation, though its proportion of both new cases and deaths has been declining and places like India have escalated.

In upcoming economic news, the European Central Bank is set to announce a policy decision Thursday, and the U.S. consumer price index will be published the same day. Leaders of the Group of Seven will meet in England at the end of the week.

July silver futures lost 0.4% last week to settle at $27.90 an ounce on Comex, despite a 1.5% rally Friday in the front-month contract. Silver gained 8.3% in May in the best monthly performance since December. The metal increased 5.5% in April and dropped in February and March. It advanced 47% in 2020 and is up 5.6% so far this year. The July contract is currently down by $0.236 an ounce to $27.660 and the DG spot price is $27.78.

Spot palladium advanced 0.2% last week to $2,850.50 an ounce on the back of a 0.7% rally Friday. It lost 4.1% in May. It’s up 16% so far in 2021. Currently, the DG spot price is down $5.70 an ounce to $2,846.50.

Spot platinum fell 1.2% last week to $1,173.10 an ounce, though it gained 0.5% Friday. It lost 1.5% in May. The autocatalyst metal is up 9.3% in 2021. The DG spot price for platinum is currently up $9.50 an ounce to $1,178.90.

 

Disclaimer: This editorial has been prepared by Dillon Gage Metals for information and thought-provoking purposes only and does not purport to predict or forecast actual results. This editorial opinion is not to be construed as investment advice or as a recommendation regarding any particular security, commodity or course of action. Opinions expressed herein cannot be attributable to Dillon Gage. Reasonable people may disagree about the events discussed or opinions expressed herein. In the event any of the assumptions used herein do not come to fruition, results are likely to vary substantially. It is not a solicitation or advice to make any exchange in commodities, securities or other financial instruments. No part of this editorial may be reproduced in any manner, in whole or in part, without the prior written permission of Dillon Gage Metals. Dillon Gage Metals shall not have any liability for any damages of any kind whatsoever relating to this editorial. You should consult your advisers with respect to these areas. By posting this editorial, you acknowledge, understand and accept this disclaimer.





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