Gold futures climbed back above the key $1,700 mark to close out the trading week, but the yellow metal will still record a weekly loss. Gold had a rough week due to bullish optimism in financial markets and sliding jewelry demand in Asia. With growing uncertainty over the coronavirus pandemic, could gold prices test $1,800 in May?
June gold futures rose $15.30, or 0.9%, to $1,709.50 per ounce at 19:16 GMT on Friday on the Comex division of the New York Mercantile Exchange. Gold prices fell 2% this week, but they did enjoy a 4% gain in April. Year-to-date, the precious metal is up nearly 13%.
Silver, the sister commodity to gold, is also rising to finish the trading week. July silver futures picked up $0.097, or 0.65%, to $15.065 an ounce. The white metal recorded a 1.9% weekly decline, but it did post a 4% monthly gain in April. Silver is down about 16% so far this year.
On Friday, the Center for Infectious Disease Research and Policy warned that the COVID-19 pandemic could last as long as two years, fueling greater demand for gold as a safe-haven asset. Before the announcement, the gradual reopening of various economies and progress on vaccine production had eaten away at some of the metal commodity’s gains.
Bearish economic data lifted gold, too. The Institute for Supply Management (ISM)’s manufacturing index slumped to 41.5% in April, down from the 49.1% reading in March – anything below 50 indicates a contraction. This is also the lowest level since April 2009.
Despite 30 million Americans losing their jobs in just six weeks and the disappointing numbers, US financial markets rallied and celebrated their best monthly gains since 1987. However, the leading stock indexes plunged on Friday on threats by President Donald Trump to slap new tariffs on China over its mishandling of the COVID-19 outbreak that infected more than three million people worldwide.
Overall, everything from geopolitical developments to economic figures, there is still plenty of uncertainty in the global economy. This does not take into account ballooning inflation concerns on the other side of the coronavirus lockdown due to aggressive quantitative easing measures by the Federal Reserve and other central banks.
Gold’s ascent was slightly capped by a rising greenback. The US Dollar Index, which measures the buck against a basket of currencies, edged up 0.06% to 99.07, from an opening of 99.02. While the dollar weakened 1.3% this week, analysts say it will likely rebound in the coming sessions as traders expect greater volatility outside the United States. A lower greenback is good for dollar-denominated commodities because it makes it cheaper for foreign investors to purchase.
In other metal markets, June copper futures tumbled $0.0325, or 1.39%, to $2.3115 per pound. June platinum futures fell $32.80, or 4.03%, to $780.20 an ounce. June palladium futures cratered $62.40, or 3.19%, to $1,893.60 per ounce.