This post was originally published on this site
Gold futures were headed lower Monday morning, starting August the way bullion ended the previous month, as equity benchmarks looked to score modest gains.
Still, some strategists are maintaining an upbeat outlook for precious metals even as data are beginning highlighting some weakness for parts of the world in the economic recovery phase from COVID-19, which is staging a resurgence in parts of the globe.
In China, data released Saturday by the National Bureau of Statistics showed that the country’s official purchasing managers index fell to 50.4 in July from 50.9 in June. Numbers above 50 indicate expansion.
“In fact, this appetite for bullion comes from investors cautiously monitoring the situation in China with the price further supported by a decreasing U.S. dollar,” wrote Pierre Veyret, technical analyst at ActivTrades, in a daily research note.
December gold
GCZ21,
GC00,
the most active contract, was down $5.12, or 0.3%, at $1,812 an ounce, after bullion on Friday rose nearly 0.9% for the week and scored a 2.6% monthly advance, its third such gain of the past four months.
Meanwhile, silver futures for September delivery
SIU21,
SI00,
were off 7 cents, or 0.3%, at $25.53 an ounce. Gold’s sister metal finished last week 1.2% higher, but suffered a monthly loss of 2.5%.
Last week, gold and other precious metals benefited from a selloff for the US dollar
DXY,
which was in response to a dovish stance of the Federal Reserve, wrote Fawad Razaqzada, market analyst at ThinkMarkets.com.
Meanwhile, Dr. Anthony Fauci, the nation’s top infectious disease expert, warned on Sunday that more “pain and suffering” is on the horizon as COVID-19 cases climb from the Delta variant and officials plead with unvaccinated Americans to get their shots.
Last week, Powell said that concerns over rising delta cases partly supported the Fed’s stance to remain patient with tapering its monthly purchases of $120 billion, known as quantitative easing, or QE, in Treasurys and mortgage-backed securities.
“In the week ahead, the US nonfarm jobs report is likely to be the main focal point for gold traders, as it could impact the Fed’s decision on the timeline of tapering QE,” Razaqzada wrote.
“It is also worth keeping a close eye on the COVID situation, for if the situation gets bad, it could negatively impact growth and in turn the Fed’s policy. Thus, the dollar could weaken and support gold as it tests key support around $1800/10 area,” the ThinkMarkets analyst wrote.
In other metals, September copper HGU21
HG00,
rose 3 cents, or 0.7%, to $4.51 a pound, after prices rose 4.5% in July.
October platinum PLV21 added $11.20, or 1.1%, at $1,059.60 an ounce, after ending 2.3% lower for the month on Friday, while September palladium PAU21 was trading $32.30, or 1.2%, at $2,688.50 an ounce, following putting in a monthly loss of 4.4%.
