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Gold Slips on Treasury Yields

Gold Slips on Treasury Yields
Category: Articles
Author Name: Dillon Gage
Posted: 02-24-2021
Last Updated:
02-24-2021

Gold slips back under $1,800 on Treasury yields this morning. The 10-year U.S. Treasury yield hit a high of 1.42%, its highest since February 2020, in turn U.S. stocks fell with the Dow off by over 100 points just after the opening bell.

*Originally published on Dillon Gage 2/24/2021

Gold slips back under $1,800 on Treasury yields this morning. The 10-year U.S. Treasury yield hit a high of 1.42%, its highest since February 2020, in turn U.S. stocks fell with the Dow off by over 100 points just after the opening bell.

The yellow metal was steady near a one-week high earlier Wednesday, propped up by a weaker dollar and comments Tuesday by Federal Reserve Chairman Jerome Powell before the Senate Banking Committee. Powell said the recovery is “uneven and far from complete” and still requires accommodative monetary policy. Stimulus actions are considered bullish for gold, because they can be inflationary, and gold is a traditional hedge against inflation. Powell is set to testify before a House committee Wednesday.

April gold futures slipped 0.1% Tuesday to settle at $1,805.90 an ounce on Comex. Prices are up 1.6% so far this week after dropping 2.5% last week. Bullion has retreated 2.4% so far in February after declining 2.4% in January. Gold climbed $372 — or 24% — in 2020 because of uncertainty about the economy and the pandemic. The April contract is down by $20 an ounce to $1,785.90 and the DG spot price is $1,787.80.

Holdings in SPDR Gold Trust fell 0.4% Tuesday to 1,110.44 metric tons, Reuters reported.

Gold is also getting support from efforts to pass President Joe Biden’s $1.9 trillion economic stimulus measure, designed as a shot in the arm to an economy still reeling from the pandemic. The House of Representatives is set to vote on the measure Friday.

The COVID-19 virus has killed more than 2.48 million people worldwide and sickened more than 112 million. About 25% of the cases — and 20% of the deaths — are in the U.S. The country has about 28.3 million cases, more than any other nation.

In addition to Powell’s testimony and the stimulus bill, investors will be watching for the release Thursday of U.S. weekly initial jobless claims and fourth quarter GDP data. Friday will bring reports on inflation and consumer spending.

May silver futures declined 1.4% Tuesday to $27.74 an ounce on Comex. They are up 1.7% so far this week. The metal is up 3.1% so far this month after gaining 1.9% in January and 47% in 2020. The front-month contract rallied 16% between Jan. 28 and Feb. 1. The May contract is currently down by $0.292 an ounce to $27.520 and the DG spot price is $27.48.

Spot platinum slipped 3.4% Tuesday to $1,238.90 an ounce and is down 3.2% this week. It has gained about 15% so far this month amid forecasts for higher demand and tighter supplies and reached six-year highs last week. The autocatalyst metal advanced 0.5% in January and 11% in 2020. Currently the DG spot price is up over $10 an ounce to $1,247.90.

Spot palladium decreased 1.9% Tuesday to $2,367.50 an ounce and is down 0.8% so far this week. It’s up 6.2% in February after plummeting 9% in January and rallying 26% in 2020. The DG spot price is currently up just over $2 an ounce to $2,362.50.

https://dillongage.com/blog/gold-slips-on-treasury-yields/

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About The Author

Author Name: Dillon Gage
This editorial has been prepared by Dillon Gage Metals. This document is for information and thought-provoking purposes only and does not purport to predict or forecast actual results. It is not, and should not be regarded as investment advice or as a recommendation regarding any particular security, commodity or course of action. Opinions expressed herein are current opinions as of the date appearing in this editorial only and are subject to change without notice. Reasonable people may disagree about the opinions expressed herein. In the event any of the assumptions used herein do not prove to be true, results are likely to vary substantially. All investments entail risks. There is no guarantee that investment strategies will achieve the desired results under all market conditions and each investor should evaluate its ability to invest for a long term especially during periods of a market downturn. No part of this editorial may be reproduced in any manner, in whole or in part, without the prior written permission of Dillon Gage Metals. This information is provided with the understanding that with respect to the opinions provided herein, that you will make your own independent decision with respect to any course of action in connection herewith and as to whether such course of action is appropriate or proper based on your own judgment, and that you are capable of understanding and assessing the merits of a course of action. You may not rely on the statements contained herein. Dillon Gage Metals shall not have any liability for any damages of any kind whatsoever relating to this editorial. You should consult your advisors with respect to these areas. By posting this editorial, you acknowledge, understand and accept the foregoing.

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