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Gold finds support at $1800, and is at all-time highs against other currencies

Commentaries & Views

Gold futures managed to close higher on the day for the first time since Tuesday of last week when gold traded to a high of $1820. Gold futures traded lower Thursday and Friday of last week, however in both days’ gold closed above $1800 per ounce. As of 4:50 PM EDT the most active August contract is currently up $3.10 and fixed at $1805. Spot gold is also showing marginal gains, currently up $3.50 at $1802.

As reported by MarketWatch, Carsten Fritsch, analyst at Commerzbank said that today’s gain, “shows that price falls such as that on Friday are still being viewed as buying opportunities and that the market wants the price to climb even further.”

He also reflected on gold’s relative value when compared to other currencies saying, “While gold has already achieved all-time highs in virtually all major currencies this year, it is still a good $100 from doing so in U.S. dollar terms,” he said. “There are plenty of arguments in favor of further price rises: the number of new [coronavirus] cases is still soaring at a record rate, both world-wide and in the U.S. This increases the potential for stock market corrections.”

Silver traded to its highest closing price since September 4, 2019. Silver futures closed today at $19.45, after trading to an intraday high of $19.81. The last time silver traded to an intraday high at this level occurred on September 30, 2016.

Concurrently U.S. equities which had been trading higher throughout the training session sold off on the close as the NASDAQ composite and the S&P 500 closed negative on the day. The tech heavy NASDAQ composite lost 2.13%, while the S&P 500 lost 0.94%. The only major index to not sustain a loss on the day was the Dow Jones industrial average which closed in essence unchanged gaining 0.04%.

Both the safe haven asset class as well as U.S. equities (risk-on assets) reacted to the global pandemic. According to John Hopkins nearly 13 million (12,995,037) individuals have contracted the novel corona virus. In the United States the total number of reported cases has now reached 3,296,599, an increase of 60,469, this according to the CDC.

Today the FDA announced that it has granted a “fast-track” status to two candidates from Pfizer and the German biotech company BioNTech SE. This is welcome news as countries worldwide continue to await a viable vaccine. However, continued concerns pressured U.S. equities today, and were supportive of both gold and silver pricing.

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Wishing you as always, good trading,

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.