Gold Rises and the Dollar Weakens: Commodity Market Trends Today

Gold prices on Monday bounced back, after hitting their lowest level in more than seven months in the previous session, as support from dollar weakness eclipsed pressure from rising Treasury yields.

Spot gold rose 0.8% to $1,796.10 per ounce by 1044 GMT, after hitting its lowest level since 2nd July at $1,759.29 on Friday. Moreover, gold futures gained 0.7% to $1,793.

The dollar hit its lowest level in several years against the pound sterling and rival currencies on Monday, but record U.S. Treasury yields hit their highest level in a year. The dollar index fell 0.4% to more than a month’s low. This became the reason for the cheapening of gold for holders of other currencies.

“The market is playing the inflation outlook story and gold is rising as a hedge against it,” said Quantitative Commodity Research analyst, Peter Fertig. It means that gold’s future depends on the rate at which inflation rises now.

A US $1.9 trillion stimulus package is expected to be passed by 28th February 2021. This could be the impetus for fast economic recovery, but at the cost of rising inflation.

Investors and traders are also monitoring the testimony of U.S. Federal Reserve Chairman, Jerome Powell, on the Semiannual Monetary Report to Congress on Tuesday, 23rd February 2021.

Besides, silver rose 3% to $28.02 an ounce, its highest level since 2nd February 2021. Platinum edged 0.1% higher, to $1,274.80.

Palladium gained 0.4% to $2,388.70, after getting a more than one-month high of $2,431.50.

Read More

Leave a Reply

Your email address will not be published. Required fields are marked *

Popular Trading Brokers:
4.3 rating
✔ Outstanding research tools ✔ Fast and user-friendly account opening
4.0 rating
✔Over 2,100+ trading instruments ✔Fixed & variable spread accounts
Axi
3.8 rating
✔Low trading fees ✔Fully regulated and authorized
4.0 rating
✔Easy and fast account opening ✔Free deposit and withdrawal
4.3 rating
✔Low minimum deposit amount ✔Low commissions on CFDs