SMM: gold prices fell on Friday, as the European Central Bank and the US government did not offer further stimulus measures, but safe-haven gold will record weekly gains due to concerns about economic recovery.
But gold still posted weekly gains after volatile trading in global stock markets.
Monthly gold futures in COMEX12, the most actively traded, closed down $16.40, or 0.83%, at $1947.90 an ounce at 13:30 in New York, after rising in the previous three sessions. Gold futures are up 0.7% this week.
December silver futures closed down 43.4 cents, or 1.6%, at $26.857 an ounce. Silver futures closed 0.5% higher this week.
Platinum futures for October closed down $1.40, or 0.2%, to settle at $939.60 an ounce. It is up 4.6% this week.
December palladium futures closed down 0. 1 U.S. dollars to settle at 2330.80 U.S. dollars an ounce. Palladium is down 0.5% this week.
In addition, COMEX12 copper for monthly delivery closed up 4.1 cents, or 1.4%, to settle at $3.0395 a pound. Copper futures are up 0.7% this week.
"the market is a little disappointed with the ECB because we had expected to see more stimulus," said EdwardMoya, a senior market analyst at OANDA.
European Central Bank President Christine Lagarde gave no signal on Thursday that the bank would expand its stimulus, and the U.S. Senate vetoed a Republican anti-epidemic aid bill on Thursday.
Gold, which is seen as a hedge against inflation and currency depreciation, has risen 28 per cent this year on the back of massive stimulus from central banks around the world.
Investors are now waiting for FED's policy meeting to be held next September 15-16.
"We are transitioning to the post-COVID-19 environment," said DanielPavilonis, senior market strategist at RJOFutures. This means that we will not introduce the same stimulus, which will send a signal to the market that things will be different. "
DanielPavilonis said gold could hit $2300 an ounce by the end of the year because of uncertainty in the stock market, the economy and the November US election.
"the recovery in the labor market has completely stalled and Congress has not agreed on the economic rescue package since the last Fed meeting, which will put more pressure on the Fed to maintain a loose stance," EdwardMoya said.
"Precious metals are still supported by low government bond yields, rising US coronavirus cases and a weak dollar," said LukmanOtunuga, a senior analyst at FXTM. Most importantly, because interest rates have been low for a long time, the Fed's policy shift is likely to lower inflation, which may bring resistance to gold. "
Rising inflationary pressures could also "erode the purchasing power of the dollar, which means that gold maintains its value while the dollar depreciates," he said.
Gold prices have risen during the global novel coronavirus outbreak and have been supported by recent stock market turmoil.
At the same time, gold investors believe that there is a lot of uncertainty before and after the November 3 US presidential election, with incumbent President Donald Trump lagging behind former Vice President Joe Biden in national opinion polls and concerns about viruses and geopolitical tensions. it has provided many possible catalysts for the market to push gold prices higher.
From a technical point of view, gold is supported at $1910 an ounce and resistance at $1985 an ounce, which is a key level of interest and could fall to $1890-$1865 if it falls below $1910, Otunuga said.
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