News

Metals Stocks: Gold looks to score first gain in 3 sessions

0

Gold futures headed higher Wednesday, on track to notch their first gain in three sessions, with support from some safe-haven buying, amid developments in Europe that suggest a longer lockdown period due to a renewed spread of COVID-19.

Gold for April delivery
GCJ21,
+0.39%

GC00,
+0.39%

rose $10.80, or 0.6%, to trade at $1,735.90 an ounce. On Tuesday, it shed 0.8% and posted the lowest settlement for a most-active contract since March 12, FactSet data show.

Germany is expected to extend its lockdown to limit the spread of coronavirus to mid April, rattling investors who fear that such a move will weigh on the region’s rebound from the pandemic.

“With rising Covid cases in Europe unnerving the global financial markets, gold is rising on safe haven inflows,” wrote Sophie Griffiths, market analyst at Oanda, in a daily research note.

Weakness in Treasury yields contributed further support for non-yielding gold. The 10-year Treasury note yield
TMUBMUSD10Y,
1.632%

was at 1.624%, off 1.4 basis points.

On Tuesday, gold investors showed little reaction to the first of two days of congressional testimony from Federal Reserve Chairman Jerome Powell and Treasury Secretary Janet Yellen on the health of the U.S. economy as America wrestles with the impact of the COVID-19 pandemic.

Read: Powell and Yellen’s game plan is evocative of the World War II playbook. Here’s what happened then.

Fed members have been “firm on the inflation concern, indicating any inflation this year will be temporary and that is bearish for gold,” said James Hatzigiannis, chief market strategist at Ploutus Capital Advisors. “The Fed and Powell have indicated time and time again they are not worried about inflation this year and [are] more concerned of getting the economy back running strong again.”

In reaction to the U.S. durable goods orders data Wednesday, which showed a fall of 1.1% in February, gold prices briefly pared their gains then recouped them about a half hour later.

Meanwhile, separate data showed that the U.S. economy grew faster in early March, with the IHS Markit’s flash service index climbing to an 80-month high of 60 from 59.8 in February. The data prompted gold to temporarily give up much of its gains.

In other Comex metals trading, May silver
SIK21,
-0.05%

traded 0.5% higher at $25.36 an ounce, after a 2.1% loss Tuesday, while May copper
HGK21,
-0.86%

was down by less than 0.1% at $4.08 a pound. April platinum
PLJ21,
+0.14%

tacked on 0.5% to $1,181 an ounce and June palladium
PAM21,
+0.52%

traded at $2,365 an ounce, up 0.7%.

Project Syndicate: Avoiding a K-shaped global recovery

Previous article

The Moneyist: My wife had a baby 3 months ago. She has $160,000 in student loans — and just asked for my ‘blessing’ to work part time

Next article

You may also like

Comments

Leave a reply

Your email address will not be published. Required fields are marked *

More in News