Gold prices edge higher as dollar drops

Published On: February 22, 2021Categories: Alternative Investments1.3 min read

Spot gold gained 0.3% to $1,787.31 per ounce, while U.S. gold futures added 0.4% to $1,784.20

Gold prices edged higher on Monday to recover from an over seven-month low reached in the previous session as the dollar weakened, although higher U.S. Treasury yields capped bullion gains.

Spot gold gained 0.3% to $1,787.31 per ounce by 0100 GMT, having reached its lowest since July 2 at $1,759.29 on Friday. U.S. gold futures added 0.4% to $1,784.20.

The dollar eased against rivals, which made gold affordable for holders of other currencies.

Benchmark U.S. Treasury yields hit a near one-year peak, raising the opportunity cost of holding bullion, which pays no interest.

President Joe Biden’s efforts for a $1.9 trillion COVID fiscal stimulus took a step forward on Friday as a U.S. House of Representatives committee unveiled the legislation Democrats hope to pass by late next week.

The risks of ongoing business failures in the United States “remain considerable” even as the economy emerges from the coronavirus pandemic, the Federal Reserve said on Friday in its semi-annual monetary policy report to Congress.

Bitcoin’s market capitalization hit $1 trillion as it reached yet another record high on Friday, countering analyst warnings that it is an “economic side show” and a poor hedge against a drop in stock prices.

The demand for physical gold in India surged last week as local prices were at their lowest since June last year, with buying expected to pick up in other Asian centres after the Chinese Lunar New Year holiday week.

Hedge funds and money managers slashed their bullish positions in COMEX gold and raised them in silver contracts in the week to Feb. 16, the U.S. Commodity Futures Trading Commission (CFTC) said on Friday.

Silver advanced 1.3% to $27.56 an ounce. Platinum gained 1.7% to $1,295.94, while palladium rose 1.6% to $2,415.38.

About the Author: Jonathan Adams

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