Gold Kicks Off March Higher As Treasurys Retreat, House Passes Stimulus Bill

Gold futures are looking to rebound from a terrible February, recording a 7% loss last month. The yellow metal is trading slightly higher on Monday amid retreating Treasury yields and inflation fears. But a stronger US dollar and a renewed rally in the broader financial markets limited gold’s gain to kick off the trading week.

April gold futures added $1.80, or 0.1%, to $1,730.60 per ounce at 12:39 GMT on Monday on the COMEX division of the New York Mercantile Exchange. Gold is coming off a weekly loss of more than 4%, bringing its year-to-date decline to nearly 9%.

Silver, the sister commodity to gold, is testing $27 on Monday. May silver futures picked up $0.40, or 1.51%, to $26.84 per ounce. The white metal also suffered a weekly loss of 5% and a February decline of more than 8%. Year-to-date, silver prices are up about 1.2%.

Metal commodities took a beating last week as the greenback and bonds soared on market chaos and interest rate hikes. But Treasury yields have stabilized, with the benchmark 10-year bond slipped 0.015% to 1.441%. The one-year bill was flat at 0.079%, while the 30-year bond surged 0.036% to 2.218%.

Rising Treasury yields are bearish for bullion because it raises the opportunity cost of holdings non-yielding assets.

The dollar is maintaining its momentum from recent sessions. The US Dollar Index (DXY), which gauges the greenback against a basket of currencies, rose 0.23% to 91.09, from an opening of 90.93. A stronger buck is bad for dollar-pegged commodities because it makes it more expensive for foreign investors to purchase. The DXY has mostly defied market expectations this year, rallying 1.3% in 2021 amid economic and market uncertainty.

Precious metals are also finding support on Congress passing President Joe Biden’s $1.9 trillion coronavirus stimulus and relief package. The bill is now being tabled in the Senate, where it is likely to pass after Democrats removed the $15 minimum wage provision from the legislation.

President Biden said during a weekend briefing:

Now, the bill moves to the United States Senate, where I hope it will receive quick action. We have no time to waste. If we act now — decisively, quickly, and boldly — we can finally get ahead of this virus. We can finally get our economy moving again.

Overall, investors are concerned about rising inflation due to stimulus, and traders are already talking about reflation.

In other metal markets, April copper futures jumped $0.047, or 1.15%, to $4.1415 per pound. April platinum futures surged $36.20, or 3.05%, to $1,221.50 an ounce. April palladium futures soared $41.50, or 1.79%, to $2,355.00 an ounce.

If you have any questions and comments on commodities today, use the form below to reply.

© AndrewMoran for Commodity News, 2021. | Permalink | No comment |
Published under: Gold

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