Dollar Weakness Boosts Gold Futures

  • U.S. stock market fell in the afternoon to provide support from micro-haven assets.
  • Gold futures closed slightly higher.
  • Some important gold buyers expect that gold prices will rise in 2021.

The US dollar exchange rate continued to weaken, and the US stock market fell in the afternoon to provide support for safe-haven assets, and gold futures closed up slightly. Gold futures for February delivery closed up $2.50, or 0.1%, to $1,882.90 per ounce. Gold futures fell 0.1% on Monday.

Gold is a chemical element with the symbol Au and atomic number 79, making it one of the higher atomic number elements that occur naturally. In a pure form, it is a bright, slightly reddish yellow, dense, soft, malleable, and ductile metal. Chemically, gold is a transition metal and a group 11 element.

Silver futures for March delivery fell 32.2 cents, or 1.2%, to $26.217 per ounce, which was a half of the 2.4% increase in the previous trading day. The Intercontinental Exchange’s dollar index fell 0.3%.

A weaker dollar makes commodities priced in dollars more attractive to overseas buyers. This, coupled with the stock market on Tuesday from earlier highs, underpinned yellow gold grid higher.

In fact, the Dow Jones Industrial Average Price Index, the Standard & Poor’s 500 Index and the Nasdaq Composite Index all fell to negative territory on Tuesday, setting an intraday record earlier in the session.

Senate Majority Leader Mitch McConnell (D-KY) blocked an attempt by Minority Leader Chuck Schumer (D-NY) to pass a bill on Tuesday. The procedure requested a unanimous vote to increase the direct payment for the coronavirus relief program at the end of the year to $2,000.

The House of Representatives passed a similar bill on Monday to increase direct payments to Americans as part of the fiscal spending plan signed by President Trump over the weekend.

“This market continues to defy physics. It’s another week and another all-time high,” Tony Zabiegala, senior wealth advisor at Strategic Wealth Partners, told Yahoo Finance on Tuesday. “But I’m really struggling to understand how we’re in a better spot today – stimulus checks or not – than we were a year ago pre-Covid, pre-lockdowns, all that.”

“I feel that we really pulled forward those 17% of gains from 2021 already,” he added.

“Technicals are pointing to a continued market melt-up. However a quick market correction to start off the year wouldn’t surprise me at all. We’ve had slowing economic data and that is the biggest catalyst in my eyes. I’m just struggling to find organic growth catalysts, and it’s being very difficult to find something to grab onto.”

Gold is a chemical element with the symbol Au and atomic number 79, making it one of the higher atomic number elements that occur naturally. In a pure form, it is a bright, slightly reddish yellow, dense, soft, malleable, and ductile metal. Chemically, gold is a transition metal and a group 11 element.

Some important gold buyers expect that gold prices will rise in 2021. Naim Aslam, chief market analyst at AvaTrade, wrote in a daily report, “this may be purely because they expect venture capital transactions to cool off at the beginning of the new year.”

The gold holdings of SPDR gold Shares, a gold exchange-traded fund, also confirmed the increase in gold holdings, from 1,167.53 tons to 1,169.86 tons.

Among other metals traded on the exchange, March copper fell 1.55 cents to close at $3.5555 per pound, a 0.4% drop, and it rose 0.2% on Monday.

The latest and most active April platinum futures price rose by $13.50, or 1.3%, to close at $1,062.60 per ounce. March palladium prices fell by $7.50, or 0.3%, to close at $2,344.30 per ounce.

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Joyce Davis

My history goes back to 2002 and I  worked as a reporter, interviewer, news editor, copy editor, managing editor, newsletter founder, almanac profiler, and news radio broadcaster.

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