Tag: Gold

Gold Holds Near Two-Month High Ahead of Fed Policy Decision

(Bloomberg) — Gold held near the highest level in more than two months as investors waited for the outcome of a Federal Reserve meeting that could offer more clues on the outlook for monetary policy tightening. Most Read from BloombergStock Rebound Fails and Futures Plunge on Earnings: Markets WrapNvidia Quietly Prepares to Abandon $40 Billion Arm BidMark Zuckerberg’s Stablecoin Ambitions Unravel With Diem Sale TalksStocks Storm Back From 4% Rout to Close Higher: Markets WrapThis Red-Hot Housin
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Gold and Copper Climb as Dollar Weakens With Eyes on Inflation

(Bloomberg) — Gold and copper surged as the dollar weakened amid signs that interests rates may remain low, boosting inflation expectations as Joe Biden begins his first day as U.S. president.The Bloomberg Dollar Spot index extended declines for a third straight day on Wednesday, supporting prices of commodities priced in the greenback. Stocks rose and bond yields tied to inflation expectations held gains from Tuesday, when Biden’s Treasury Secretary nominee Janet Yellen said that a slew of state spending was needed to fight the Covid-19 pandemic, while playing down concerns about the debt it creates.“Precious metals were supported above all by a weaker U.S. dollar, which fell further on the back of renewed strength for stock markets,” Fawad Razaqzada, a market analyst at ThinkMarkets, said in a note. “The path of least resistance is now to the upside again,” with gold trading above last week’s high and finding support above its 200-day moving average, he said.Yellen’s Tuesday testimony was key in weakening the dollar while lifting gold and base metal prices, according to Commerzbank analysts Carsten Fritsch and Daniel Briesemann. Copper had additional support on signs of greater risk appetite, the bank said. Industrial metals have been helped by expectations of increased Chinese and U.S. demand as Covid-19 vaccines continue to be be distributed and economies recover, ramping up spending on raw goods.“The metals prices are supported by the further rising stock markets, which express the high risk appetite of market participants,” Briesemann said. “This is fed by hopes that economic life will return to normal with the vaccinations that have now begun.”Biden became the 46th U.S. president in Wednesday’s inaugural ceremony that unfolded under heavy security after weeks of tumult and unrest stoked by Donald Trump. Next, traders will be looking toward the president’s ability to pass his economic stimulus plans through Congress, which would fuel another surge in metals demand in the U.S., the second-largest metals consumer after China.“All else being equal, a Biden presidency supported by control of the House and Senate, ought to be very favorable for gold,” Bryan Slusarchuk, chief executive officer of Fosterville South Exploration Ltd., said in an email.With Democratic leaders pushing for nearly $2 trillion in stimulus, there are “very big signals that the proverbial kitchen sink is about to be thrown at an effort to prop up a fragile economy, an effort that may have short-term impact but in the long term will cause further pain and ultimately will be negative for the U.S. dollar and positive for gold,” Slusarchuk said.Spot gold rose 1.7% to $1,871.84 an ounce by 5 p.m. in New York. Silver, platinum and palladium also pushed higher. Copper prices closed 1.1% higher at $8,044.50 a metric ton on the London Metal Exchange, with all major base metals rising. The Bloomberg Dollar Spot Index dropped 0.2%.(An earlier version of this story corrected location of timestamp)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
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Gold Near Eight-Week High as Covid Angst Fires Up Haven Demand

(Bloomberg) — Gold continued its strong start to the year as lower U.S. real yields and a weaker dollar combined with surging coronavirus cases to boost demand for the haven asset.Bullion traded near an eight-week high as U.S. 10-year inflation expectations topped 2% for the first time since 2018 on hopes that monetary stimulus and government aid policies will drive demand in the post-vaccine world. The higher expectations boost gold’s appeal over havens like treasuries, which have seen their inflation-adjusted yields turn negative.“The reflation element combined with a weaker dollar and lower real yields all points to further short-term gains” for gold, Ole Hansen, head of commodities strategy at Saxo Bank A/S, wrote in a note.Building on the biggest annual gain in a decade, gold has made a strong start to the new year as virus angst clouds the outlook for the recovery. Global infections climbed above 85 million, after daily cases in the U.S. soared to a record of nearly 300,000. The variant strain of the coronavirus first identified in the U.K. has been found in New York State, while British Prime Minister Boris Johnson ordered a national lockdown in England.The somber Covid outlook appears to have revitalized demand for gold from investors seeking havens. Holdings in SPDR Gold Shares, the largest bullion-backed exchange-traded fund, posted the biggest daily inflow since September on Monday, following withdrawals in the last three months of 2020.Spot gold climbed 0.2% to $1,945.95 an ounce at 10:27 a.m. in London. The metal surged 2.3% on Monday, the most in two months. Silver and palladium also rose.Traders were also tracking Tuesday’s runoff elections in Georgia. The U.S. contest will determine whether Democrats have control of Congress to push President-elect Joe Biden’s agenda. That would aid gold, according to Saxo Bank’s Hansen, as the Biden administration would be able to increase spending and boost stimulus.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
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