Connect with us

Hi, what are you looking for?

Commodities & Futures

Gold Closes in On $1,800 After Strongest Week in 4 Months

imageCommodities59 minutes ago (Apr 16, 2021 01:10PM ET)

(C) Reuters.

By Barani Krishnan

Investing.com – Gold is on track to its best weekly showing since December as U.S. inflation risks and a reintroduction of political risk hedging helps set the yellow metal on a potential return path to $1,800 pricing.

Benchmark gold futures on New York’s Comex as well as the spot price of bullion were up almost 2% each on the week in Friday’s afternoon trade. It was the strongest relative performance in four months, since the week ended Dec. 11, when futures rose 2.5% and bullion 2.2%.

Gold’s resurgence this week came as U.S. bond yields plunged amid a hike in consumer prices that reasserted the yellow metal’s diminished role as a hedge against inflation.

Sweeping sanctions imposed on Russia by the United States on Thursday also brought gold back — in the eyes of some, at least — as a protection against political risk.

U.S. bond yields, measured by the 10-year Treasury note, hovered at 1.58% on Friday, markedly lower from a 14-month high of 1.77% on March 30.

“It would appear that the bond market is finally buying into the Fed’s low-for longer verse which would be supportive of non-yielding gold,” said Sophie Griffiths, research head for the U.K. and EMEA at online broker OANDA.

Gold has been throttled in recent months by bond yields and the dollar that often surged on the argument that U.S. economic recovery from the coronavirus pandemic could exceed expectations, as the Federal Reserve kept interest rates at near zero.

Griffiths noted that geopolitics were also “back with a bang” this week amid the heightening showdown between world powers America and Russia, driving investors toward safe havens such as gold.

Adding to gold’s strength was a weaker dollar, which typically boosted the yellow metal. The Dollar Index, which pits the greenback against the euro and five other major currencies, weakened on Friday to 91.56 versus Thursday’s settlement of 91.62.

Gold had a scorching run in mid-2020 when it rose from March lows of under $1,500 to reach record highs of nearly $2,100 by August, responding to inflationary concerns sparked by the first U.S. fiscal relief of $3 trillion approved for the coronavirus pandemic.

Breakthroughs in vaccine development since November, along with optimism of economic recovery, however, forced gold to close 2020 trading at just below $1,900.

This year, the rut worsened as gold fell first to $1,800 levels in January, then collapsed to below $1,660 at one point in March.

Such weakness in gold is remarkable if considered from the perspective of the Covid-19 stimulus of $1.9 trillion passed by Congress in March, and the Biden administration’s plans for an additional infrastructure spending of $2.2 trillion.

Typically, stimulus measures lead to dollar debasement and inflation that sends gold rallying as an inflation hedge. But logic-suspending selloffs instead took place in gold over the past six months, with some Wall Street banks lending inane commentary to support these.

Gold Closes in On $1,800 After Strongest Week in 4 Months

Crude Oil Prices Dip on Profit-Taking After Strong Week

Crude Oil Prices Dip on Profit-Taking After Strong Week
By Investing.com – Apr 16, 2021

By Geoffrey Smith
Investing.com — Crude oil prices fell on Friday but stayed comfortably above $60 a barrel, the market apparently settling into a new range on the back of strong…

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

image

Our Apps

DOWNLOAD APPApp store

Investing.com

(C) 2007-2021 Fusion Media Limited. All Rights Reserved

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.

Click to comment

Leave a Reply

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

You May Also Like

Uncategorized

Neque porro quisquam est, qui dolorem ipsum quia dolor sit amet, consectetur, adipisci velit, sed quia non numquam eius modi tempora incidunt.

Uncategorized

Nemo enim ipsam voluptatem quia voluptas sit aspernatur aut odit aut fugit, sed quia consequuntur magni dolores eos qui ratione.

Uncategorized

Quis autem vel eum iure reprehenderit qui in ea voluptate velit esse quam nihil molestiae consequatur, vel illum qui dolorem eum.

Uncategorized

Neque porro quisquam est, qui dolorem ipsum quia dolor sit amet, consectetur, adipisci velit, sed quia non numquam eius modi tempora.

Disclaimer: Buzzclever.com it's managers and its employees (collectively "The Company") do not make any guarantee or warranty about what is advertised or above. Information provided by this website is for research purposes only and should not be considered as personalized financial or health advice. Copyright © 2021 Buzz Clever. All Rights Reserved