Gold steadies near $1,800/oz on virus fears, U.S.-China spat
· Gold steadied near the $1,800 level on Friday after a sharp fall in the previous session, as worries over surging coronavirus cases and U.S.-China tensions underpinned its safe-haven appeal, although a stronger dollar capped gains.
· Spot gold was up 0.1% at $1,797.52 per ounce by 0248 GMT. U.S. gold futures eased 0.1% to $1,797.30.
“Gold is being held up due to rising geopolitical uncertainty, and a resurgence of coronavirus cases in the United States as well as across the world. However, a stronger USD has kept gold in check,” National Australia Bank economist John Sharma said.
· The dollar held firm against its rivals, also benefiting from safe-haven inflows.
· The United States reported at least 70,000 new COVID-19 cases on Thursday, a record daily increase for the seventh time this month, according to a Reuters tally.
· New York Fed President John Williams said it could take a few years for the U.S. economy to recover from the damage caused by the pandemic, and it was not yet the time to think about raising interest rates.
“The bull’s case for gold remains intact with real rates low and suppressed and which would be able to sustain the high price of gold. But with prices at yearly highs, buying the dips probably works out best for most traders as a trading strategy,” Phillip Futures said in a note.
· Lower U.S. interest rates increase the appeal of non-yielding bullion.
· Markets also kept a wary eye on China’s trade relations with the U.S., with Washington considering a ban on travel to the United States by all members of the Chinese Communist Party and their families, a person familiar with the matter said.
· Elsewhere, palladium dropped 1.3% to $1,970.52 per ounce, while platinum was steady at $824.17.
· Silver fell 0.6% to $19.05, but was on track for a sixth consecutive weekly rise.
Gold to push above $3K in 3-5 years: Fiat currency is a key bubble — hedge fund
Gold prices could nearly double in just three to five years, according to one hedge fund manager, who sees gold as an anti-bubble in an environment fraught with asset bubbles and runaway inflation.
Ultra-accommodative monetary policies and unlimited money printing will catch up with the markets and gold will rise above $3,000 an ounce in the next three to five years, Diego Parrilla, who heads the $450 million Quadriga Igneo fund, told Bloomberg this week.
Parrilla’s fund, which has delivered a 47% return this year, is made up of cross-asset hedges.
Yamana Gold's Q2 production is lower due to COVID-19 suspensions
Yamana Gold (TSX:YRI) announced today gold production of 164,141 ounces and silver production of 2.01 million ounces.
The gold miner released preliminary production results.
Production was down compared to the previous quarter when gold production came in at 192,238 ounces and silver production was 2.73 million ounces.
The company said that overall production in Q2 from most mines exceeded plan and the production in the company’s annual guidance.
Gold Price Prediction – Prices Fall as the Dollar Rebounds Following Strong Retail Sales Report
Gold prices moved lower on Thursday as the dollar rebound following news that the ECB kept interest rates unchanged. The central bank also announced that it would not increase the Pandemic Emergency Purchase Program in July. ECB’s bond-buying in the final week of June fell to its slowest pace since the expansion of the program. Additionally, stronger than expected retail sales failed to buoy US treasuries as yields slipped slightly.
Technical Analysis
Gold prices moved lower and tested support near the 10-day moving average near 1,797. A break of this level could lead to a test of support near the 50-day moving average near 1746. Resistance is seen near the July highs at 1,815. Medium-term momentum has turned negative as the MACD (moving average convergence divergence) index generated a crossover buy signal. This occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses above the MACD signal line (the 9-day moving average of the MACD line).
Reference: CNBC, Kitco,FX Empire
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