Advertisement 1

Gold flat, pares gains after jumping 1% on vaccine hopes

Article content

Gold was little changed on Monday after

jumping 1% during the session, paring gains as U.S. equities

rose on hopes for a potential COVID-19 vaccine trial, while

auto-catalyst palladium rose to the highest in almost three

Article content

weeks.

Spot gold was little changed at $1,740.90 per ounce

by 1042 ET. U.S. gold futures fell 0.7% to $1,744.

“The trend is still to the upside, there’s still plenty of

reason to buy gold – right now the reason why gold is kind of

wobbling around positive and negative change for the day is

Advertisement 2
Story continues below
Article content

because everybody is thinking ‘risk-on’ get into equities – as

markets across the board are up 3%,” said Michael Matousek, head

trader at U.S. Global Investors.

Wall Street’s main indexes surged as encouraging early data

from a potential coronavirus vaccine trial boosted sentiment,

with investors also counting on more stimulus to rescue the

economy from a deep slowdown.

Federal Reserve Chairman Jerome Powell highlighted that the

most important data for the U.S. economy right now are the

“medical metrics” around the pandemic and he outlined the likely

need for three to six more months of government financial help

for firms and families.

SPDR Gold Trust holdings, the world’s largest

gold-backed exchange-traded fund, rose 0.8% to 1,113.78 tonnes

on Friday – its highest in more than seven years. Data

published that day showed U.S. retail sales and industrial

production both plunged in April, with the coronavirus crisis

continuing to pummel the U.S. labor market.

Data in Japan, meanwhile, confirmed that the world’s

third-largest economy slipped into recession in the first

Advertisement 3
Story continues below
Article content

quarter.

Markets are also keeping a wary eye on China’s trade

relations with the United States.

Among other precious metals, palladium soared 5.3% to

$2,001.54 an ounce after gaining more than 9% earlier.

“One of the drivers of palladium is catalytic converters and

there’s a lot of talk about auto manufacturers ramping up

production. Some traders are probably thinking they’re going to

get ahead of the curve and they start to buy palladium ahead of

the ramp up by the auto manufacturers,” U.S. Global Investors’

Matousek added.

Both platinum and palladium are used by automakers in

catalytic converters to clean car exhaust fumes.

Platinum rose 2.8% to $819.93 an ounce, while silver

jumped 3.1% to $17.13 – with both metals having hit a

two-month high earlier.

(Reporting by Asha Sistla in Bengaluru; Editing by David

Gregorio)

Article content
Comments
You must be logged in to join the discussion or read more comments.
Join the Conversation

Postmedia is committed to maintaining a lively but civil forum for discussion. Please keep comments relevant and respectful. Comments may take up to an hour to appear on the site. You will receive an email if there is a reply to your comment, an update to a thread you follow or if a user you follow comments. Visit our Community Guidelines for more information.

This Week in Flyers