Silver tops $24/oz for highest finish since 2013
Gold futures climbed past $1,900 an ounce on Monday to tally their highest settlement and intraday on record, as investors continued to fret over the state of the COVID-19 battered global economy and weakness in the U.S. dollar, amid concerns over the sustainability of recent stock gains.
August gold GC00, -0.28% GCQ20, -0.28% rose $33.50, or 1.8%, to settle at $1,931 an ounce after trading as high as $1,941.90. The settlement topped the previous record of $1,897.50 from Friday and Monday’s close also topped the previous intraday record of $1,923.70 from Sept. 6, 2011, according to Dow Jones Market Data.
Last week, prices rose 4.8%, the biggest weekly percentage climb since the week ended April 9 and some analysts say the never-before-seen level of $2,000 an ounce is within reach. U.S. stocks closed lower on Friday, with the heavy Nasdaq Composite COMP, +1.67% marking its first back-to-back decline since mid-May.
‘With concerns about further pandemic-related lockdowns, the U.S. dollar decline, real rates continuing to plummet, and rising U.S.-China tensions, it is the entire list of fundamental drivers to get us there getting delivered up in one package…’— Stephen Innes, AxiCorp
“With concerns about further pandemic-related lockdowns, the U.S. dollar decline, real rates continuing to plummet, and rising U.S.-China tensions, it is the entire list of fundamental drivers to get us there getting delivered up in one package today,” said Stephen Innes, chief global markets strategist at AxiCorp, of that $2,000 level in a note to clients.
“Given the slumping view toward U.S. economic prospects and ideas that Europe will open a significant macroeconomic edge over the U.S., it is not surprising to see the dollar forge yet another lower low for the move and, in turn, contribute to the upward extension in precious metals prices,” analysts at Zaner Metals wrote in a Monday note.
“Not surprisingly, investors also added to the bullish environment with news that Friday saw 1.76 million ounces purchased by gold [exchange-traded funds], with a more astonishing purchase of 9.1 million ounces of silver by silver ETFs,” they said.
The gold market “continues to get a tremendous amount of bullish press coverage and that is likely to embolden the bull camp further, and is likely to result in an even wider cross section of small investors learning about precious metals ETFs for the first time,” the Zaner Metals analysts said.
In Monday dealings, the gold-backed SPDR Gold Trust GLD, +1.97% traded 1.8% higher.
“Another bullish force is a ratcheting up of expectations for U.S. central bank action, as soft U.S. data and the unending infection threat is starting to sink sentiment, and we suspect the [Federal Reserve] is now very keen to cushion against renewed shutdown fears,” analysts at Zaner Metals said.
The Federal Open Market Committee will make an announcement on monetary policy on Wednesday.
And in China, the U.S. says it has closed its consulate in Chengdu, a move ordered by Beijing after the closure of the Chinese consulate in Houston last week.
Virus outbreaks and the effect on global economies has also seen investors flocking to gold. While investors have been consumed by concerns about outbreaks across the southern U.S. states, Spain emerged as a fresh worry amid a resurgence of the virus, notably in the northeast region of Catalonia. The U.K. government put Spain back on a list of countries it deemed unsafe for travel and ordered travelers to isolate for 14 days upon return from the popular holiday destination.
“There has been a lot of talk about the $2K hurdle, which has been my long-term target too,” said Fawad Razaqzada, market analyst at ThinkMarkets, in a market update. “Obviously, there is no guarantee gold will get there or indeed stop there, but that target is only [around] $55 away from the overnight high.”
Meanwhile, the September silver contract SIU20, -2.94% climbed $1.65, or 7.2%, to settle at $24.501 an ounce—scoring the highest most-active contract settlement since August 2013, according to FactSet data.
September copper HGU20, -0.50% edged up 0.2% to $2.8975 a pound. October platinum PLV20, -0.95% added 1.1% to $966.60 an ounce, while September palladium PAU20, -0.12% ended at $2,369.70 an ounce, up 3.3% for the highest finish since March.
Source: Market Watch: Gold price marks highest settlement and intraday price on record