Gold prices rose higher on Monday, partly supported by a slide in government bond yields and the US dollar, which were the attraction of the precious commodity.
But the yellow metal may also have attracted extra interest after a public submission that offered a glimpse of Warren Buffett’s Berkshire Hathaway Inc. BRK.A,
BRK.B,
revealed that the conglomerate took a new stake in its second-largest gold miner, Barrick Gold Corp., last quarter. BLK,
To read: Did Warren Buffett just bet against the US economy? His latest investment raises some questions
Last week, gold came under pressure when US Treasuries climbed to a height of eight weeks, deviating from the call of bullion. However, gold enthusiasts argue that uncertainty about the economic landscape fostered by the COVID-19 pandemic makes bullion a solid long-term bet, especially as countries spend trillions to support their economies.
On Monday, Treasury yields slipped, with the 10-year Treasury note rate TMUBMUSD10Y,
at 0.69% and one meter of the US dollar against half a thousand currencies, the ICE US Dollar Index DXY,
off 0.1%. Gold benefits from lower yields because it does not offer a coupon and a weaker dollar can make bullion more attractive to users of other currencies.
Some experts see the recent pullback of gold and silver from a recent strong uptrend as consolidation ahead of its next phase. Gold got a sharp pullback on Tuesday that helped snap a quarterback of the week.
“We will have a new Bullish signal with a clear oversupply of $ 1,965, in a scenario that remains dominated by coronavirus news and fears of further lockdowns,” Carlo Alberto De Casa, chief analyst at ActivTrades, wrote in a note. “Expectations for further actions by central banks remain constant and this is another supporting element for gold. A recent decline below the $ 1,920- $ 1,930 support zone would indicate weakness. ”
Indeed, the People’s Bank of China on Monday injected fresh liquidity into the financial system, while keeping the rate stable at 2.95% on a one-year medium-term loan facility of $ 100.74 billion, while addressing the effects of the viral outbreak, Reuters reported.
December gold GCZ20,
GC00,
rose $ 14.10, or 0.7%, to $ 1,963.90 an ounce after the metal took a weekly decline of about 3.9% on Friday, marked last Tuesday by the biggest daily dollar fall since April 15, 2013.
Meanwhile, silver prices are September SIU20,
rose 94 cents, or 3.6%, to $ 27,030 an ounce after a 5.3% weekly loss.
.
