Gold futures were modestly higher on Wednesday, ready to post a ninth straight gain after scoring a record deal and intraday high a day earlier, as investors await the outcome of a Federal Reserve policy meeting.
In the weeks after the last Fed meeting, “the number of new [COVID-19] cases in the US have skyrocketed, “many states and local governments have re-imposed restrictions on personal movement, and the number of new applicants for unemployment benefits has remained stagnant” at more than a million, Agathe said Demarais, director of global forecasting for the Economist Intelligence Unit, in comments sent via email.
The Fed wraps up a policy meeting two days later on Wednesday, with a statement at 2 pm ET, after gold futures settle for the session, followed by President Jerome Powell’s press conference to 2:30 pm Economists and investors do not expect any policy adjustments, but look for Powell to maintain a moderate tone, indicating that the central bank is committed to maintaining a flexible monetary policy and is prepared to do more if necessary. to avoid a further slowdown.
Read: The Fed will not be happy with the performance of the economy, but is not disturbed enough to take aggressive action.
“In June, the Fed gave a negative tone, warning that the chances of a quick recovery in the second half of the year and a prolonged decline were more or less uniform,” Demarais said. “Given development since then, the likelihood of the Fed becoming darker is still high.”
In this context, gold for delivery in August GC00,
GCQ20,
It rose $ 2.10, or 0.1%, to $ 1,946.70 an ounce on Comex. Gold ended at a record $ 1,944.60 an ounce on Tuesday. She appears to achieve a ninth straight session gain, the longest streak since the 10-session climb ended in January.
“The rapid recovery makes it clear that the market wants to raise prices, so a renewed supply is likely for the record,” Carsten Fritsch, an analyst at Commerzbank, said in a note.
Powell “is likely to provide a moderate perspective at the virtual press conference after the meeting. He can also comment on plans to anchor long-term interest rates to a low level by adjusting the forward orientation and possibly pursuing the control of the yield curve, “Fritsch said.” This would consolidate negative real interest rates, in which case the new all-time highs for gold and a rise above $ 2,000 per troy ounce would be just a matter of time. ”
Meanwhile, after reaching the top for a more active contract earlier this week, September SIU20 silver,
it fell 2 cents, or 0.08%, to $ 24.28 an ounce. Prices, however, are trading more than 30% more to date.
Silver has recovered “for many of the reasons that gold is, as both are precious metals that are sought as a refuge in times of economic uncertainty and financial market volatility,” said Jordan Eliseo, Manager of Listed Products e Investment Research at The Perth Mint.
“Unlike gold, which the market regards more as a monetary metal, silver is also widely used in industry, which is one reason why price movements (both up and down) can often be more volatile than the movements seen in gold itself, ”he told MarketWatch.
Looking ahead, “there is no guarantee that history will repeat itself, but an increasing number of investors are positioning their portfolios to benefit if silver outperforms gold in the coming years, as it has in the past three months,” Elisha said.
Among other metals traded on Comex on Wednesday, September HGU20 copper,
shed 0.5% at $ 2.9035 per pound. Platinum October PLV20,
lost 3% at $ 956.40 an ounce and palladium September PAU20,
it fell 7.2% to $ 2,195.50 an ounce.
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