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Gold is set for second weekly dive
On Friday, gold remained close to its lowest value this year because a weaker greenback didn’t manage to stoke appetite for the number one precious commodity.
August delivery gold futures went down 0.04% on the Comex exchange trading at $1,270.10 a troy ounce. On Thursday, gold had reached this year’s minimum of $1,260.00 before clawing back losses.
A diving greenback generated rather a muted reaction in gold prices that remained on course for a second-straight weekly dive having tumbled almost 3% this week. It’s because market participants are afraid of a more hawkish Fed stance would stifle demand for the most popular precious metal.
Hopes for a fourth rate lift at the Fed's December gathering managed to ascend to up to 50% from nearly 40% on Thursday. That’s what investing.com's Fed Rate Monitor tool informed.
Gold has always strongly reacted to any moves in both bond profits and the evergreen buck. It’s a common occurrence that a stronger greenback makes the yellow commodity more expensive for investors, holding foreign currency. On the contrary, an ascend in American interest rates, increased the opportunity cost of holding gold because this commodity doesn’t pay interest.
Evidently, gold prices didn’t manage to capitalize on a mild uptick in safe haven demand in the face of Donald Trump’s threat to come up with a 20% duty on all car imports from the European Union.
By the way, renewed threats of trade penalties on imported European goods showed up just a day after the European Union’s retaliatory duties on imported American goods came into effect on Thursday.
As for other precious commodities, silver futures managed to ascend 0.70% being worth $16.44 a troy ounce. Besides this, platinum futures gained 1.36% demonstrating $875.10 an ounce.
Copper leapt 0.28% trading at $3.03.
The market optimism waned amid stricter restrictions to control rising coronavirus infections. S&P 500 and Nasdaq dropped from the all-time highs, while the USD jumped higher.
S&P 500 skyrocketed to the all-time high on optimism that Biden’s fiscal stimulus will support economic growth and boost corporate earnings.
PMI reports from the EU, the UK, and the USA will be released during the day!