Metals Stocks Archives | Email alerts

July 6, 2020, 2:07 p.m. EDT

Gold ends at a nearly 1-week high as U.S. dollar softens to start July’s first full week

Silver futures up nearly 2% on Comex

new
Watchlist Relevance
LEARN MORE

Want to see how this story relates to your watchlist?

Just add items to create a watchlist now:

  • X
    U.S. Dollar Index (DXY) (DXY)
  • X
    Gold Aug 2020 (GCQ20)
  • X
    Silver Sep 2020 (SIU20)

or Cancel Already have a watchlist? Log In

By Myra P. Saefong and Mark DeCambre, MarketWatch


Mario Tama/Getty Images
Gold futures end Monday with a gain

Gold futures finished Monday at their highest prices in nearly a week, supported in part by a softer U.S. dollar, which provided a runway higher for the commodity even as global stocks rallied.

The U.S. dollar was off 0.5% in Monday dealings, as measured by the ICE U.S. dollar index /zigman2/quotes/210598269/delayed DXY -0.26% , a gauge of the buck against a half-dozen currencies. A weaker U.S. dollar can make assets priced in the currency more attractive to buyers using other monetary units.

“Seeing as dealers are keen to take on more risk today, it is likely that gold’s positive move is almost exclusively down to the weakness in the dollar,” said David Madden, market analyst at CMC Markets UK, in a market update.

Moves in the greenback came amid a broad rally in equities that has been attributed to a surge in Chinese markets. Beijing’s state-run media published a front-page editorial encouraging investors to buy stocks to support domestic markets.

Still, investors are wrestling with the climbing tally of new COVID-19 cases in the U.S., concentrated in a number of hot-spot states including Arizona and Florida.

“Bullion prices don’t typically jump because of social unrest or geopolitical strife. But if those stresses add to a financial crisis or economic slump,” gold prices can spiral higher, said Adrian Ash, director of research at BullionVault.

Against that backdrop, August gold /zigman2/quotes/210037452/delayed GCQ20 +0.16%  rose $3.50, or 0.2%, to settle at $1,793.50 an ounce, the highest finish for a most-active contract since June 30, when prices ended above $1,800 for the first time since September 2011. Prices on Thursday ended 0.5% higher for the holiday-abbreviated week, according to FactSet data.

Gold saw some pressure, briefly giving up earlier gains that had lifted prices to as high as $1,799 shortly after economic data released Monday showed that the Institute for Supply Management’s index of nonmanufacturing companies jumped to 57.1% in June from 45.4% in May.

That marked the single-biggest increase since the survey was created in 1997. However, growth looked so strong because it occurred after a few months of extremely low activity.

It’s “hard to see what stops gold reaching new highs from here,” said Ash.

In a daily note, he explained that “last week’s swing towards 2011 levels in U.S. dollar terms near $1,800 per ounce is attracting a flood of new interest, piling on top of January-June’s heavy demand.”

“Fear of missing out could spur a dramatic spike [in gold] if the economic, health and political news continues to darken,” Ash said. “Heaven forbid we get a hot, angry summer to match 2011. But rarely have there been so many tailwinds for gold.”

“The economic slump caused by Covid-19 has spurred record government deficits and central-bank inflation to try and offset it,” he said. “China’s power grab in Hong Kong is worsening geopolitical tensions ahead of November’s U.S. election, with the U.K.’s looming no-deal exit from the [European Union] now baked in the crust for December.”

Read: Gold posts largest quarterly gain in 4 years; talk of record prices by year-end grows

Meanwhile, September silver /zigman2/quotes/210318628/delayed SIU20 -0.61% rose 26 cents, or 1.4%, at $18.582 an ounce, after the metal put in a weekly gain of 1.6%.

Among other metals traded on Comex, September copper /zigman2/quotes/210058775/delayed HGU20 +0.77%  tacked on nearly 1% to $2.7745 a pound. October platinum /zigman2/quotes/213501024/delayed PLV20 -2.12%  rose 0.7% to $837.70 an ounce and September palladium /zigman2/quotes/213028404/delayed PAU20 -0.73%  settled at $1,952.30 an ounce, up 1.3%.

/zigman2/quotes/210598269/delayed
US : U.S.: ICE Futures U.S.
93.38
-0.25 -0.26%
Volume: 0.00
Aug. 12, 2020 11:15a
loading...
/zigman2/quotes/210037452/delayed
US : U.S.: Nymex
$ 1,935.60
+3.00 +0.16%
Volume: 329.00
Aug. 12, 2020 10:44a
loading...
/zigman2/quotes/210318628/delayed
US : U.S.: Nymex
$ 25.89
-0.16 -0.61%
Volume: 187,033
Aug. 12, 2020 11:15a
loading...
/zigman2/quotes/210058775/delayed
US : U.S.: Nymex
$ 2.90
+0.02 +0.77%
Volume: 74,171
Aug. 12, 2020 11:15a
loading...
/zigman2/quotes/213501024/delayed
US : U.S.: Nymex
$ 950.80
-20.60 -2.12%
Volume: 13,316
Aug. 12, 2020 11:15a
loading...
/zigman2/quotes/213028404/delayed
US : U.S.: Nymex
$ 2,159.20
-15.80 -0.73%
Volume: 1,202
Aug. 12, 2020 11:15a
loading...

Myra Saefong is a MarketWatch reporter based in San Francisco. Follow her on Twitter @MktwSaefong. Mark DeCambre is MarketWatch's markets editor. He is based in New York. Follow him on Twitter @mdecambre.

This Story has 0 Comments
Be the first to comment
More News In
Markets

Story Conversation

Commenting FAQs »

Partner Center

World News from MarketWatch

Link to MarketWatch's Slice.