By Mark DeCambre, MarketWatch
Mario Tama/Getty Images
Gold prices rallied Monday, with the gain helping the precious metal put in the best one-day gain in about four months on the back of a slide in government bond yields and the U.S. dollar, which were raising the appeal of the precious commodity.
But the yellow metal also may have drawn additional interest after a public filing that offered a peek of holdings of Warren Buffett’s Berkshire Hathaway Inc. (NYS:BRK.A) (NYS:BRK.B) revealed that the conglomerate had taken a new stake last quarter in the world’s second-largest gold miner, Barrick Gold Corp. (NYS:BLK)
Last week, gold came under pressure as U.S. Treasurys climbed to an eight -week high, detracting from the appeal of bullion. However, gold enthusiasts insists that uncertainty about the economic landscape fostered by the COVID-19 pandemic make bullion a solid long-term bet, particularly as countries spend trillions to support their economies.
On Monday, Treasury yields were slipping, with the 10-year Treasury note rate (XTUP:BX:TMUBMUSD10Y) at 0.676% and a gauge of the U.S. dollar against a half-dozen currencies, the ICE U.S. Dollar Index (IFUS:DXY) , off 0.1%. Gold benefits from lower yields because it doesn’t offer a coupon and a weaker dollar can make bullion more attractive to users of other currencies.
Some experts view gold and silver’s recent pullback from a recent powerful uptrend as consolidation ahead of its next phase. Gold suffered a sharp pullback on Tuesday that helped to snap a weekly win streak.
“We will have a new bullish signal with a clear surpass of $1,965, in a scenario that remains dominated by coronavirus news and fears of further lockdowns,” wrote Carlo Alberto De Casa, chief analyst at ActivTrades in a note. “Expectations for further actions by central banks remain ever present and this is another supportive element for gold. A fresh decline below the support zone of $1,920-$1,930 would denote weakness.”
Indeed, the People’s Bank of China on Monday injected fresh liquidity into its financial system while it kept the rate steady at 2.95% on a one-year medium term lending facility $100.74 billion while it deals with the effects of the viral outbreak, Reuters reported .
December gold (NYM:GCZ20) (NYM:GC00) rose $48.90, or 2.5%, to settle at $1.998.70 an ounce, marking its best daily climb on a point and percentage basis since April 22, after the metal on Friday notched a weekly decline of about 3.9%, highlighted last Tuesday by the biggest daily dollar decline since April 15, 2013.
Meanwhile, September silver prices added $1.57, or 6%, to finish at $27.667 an ounce following a 5.3% weekly loss.
Elsewhere on Comex, September copper added 4.25 cents, or 1.5%, to settle at $2.9015 a pound. October platinum gained $8.50, or 0.9%, to finish at $967.60 an ounce, while September palladium rose $90, or 4.2%, to settle at $2,233.80 an ounce.