Gold Prices Trade Near the Flatline
Gold futures traded around break-even levels in Commodities on Monday. The U.S. dollar slightly weakened heading into the last trading session in August.
Bullion continues to be viewed as a haven in the face of the COVID-19 pandemic drawing increased attention last week. This was after the Federal Reserve said it is shifting to a policy of average inflation.
It targets which would effectively see policy makers end the practice of preemptively hiking interest rates to stave off inflation. That setup is viewed as a bullish one for gold.
Expectations for a low-rate regime in the U.S., and in much of the developed world, and softness in the U.S. dollar also has boosted appetite for gold, experts say.
What boosted appetite for gold were expectations for a low-rate U.S. regime, and in much of the developed world. Softness in the U.S. dollar also boosted the precious metal.
Gold will continue to be one of the best beneficiaries of the dollar’s weakness. So expect to see a retest above $2,000 in the upcoming weeks. These were written by Hussein Sayed, chief market strategist at FXTM, in a Monday note.
December gold GCZ20, +0.15% GC00, +0.15% picked up 30 cents. It was less than 0.1%, at $1,975.10 an ounce.
Silver
Gold’s move comes as the U.S. dollar was off 0.2%. This was measured by the ICE U.S. Dollar Index DXY, -0.22%. That is a gauge of the buck against a half-dozen currencies.
The most-active December silver contract SIZ20, +1.79% SI00, +2.46%, meanwhile, added 47 cents. That was 1.8%, at $28.26 an ounce.
Hope for some pickup in economic activity, amid promises of potential coronavirus treatments, also has boosted appetite for silver. Silver is viewed to be under both industrial and precious metals.
Last week, gold saw a weekly rise of 1.4%, while silver tallied a weekly advance of nearly 4%. This was based on last Friday’s most-active contract settlements, according to Dow Jones Market Data.
According to FactSet data, for the month, gold declined 0.5%, while silver surged 16% for the month.
Meanwhile, in other commodity news, the September futures contract in the natural gas futures market rolled to October last week. This was a sign that the injection season will soon end.
Also it was a sign that stockpiles will begin to decline as the peak demand season starts. The withdrawal season runs from November through March each year.
There are only approximately twelve weeks left. That is until natural gas flows out of storage across the US to meet the rising heating requirements.
