The Classy Investors

  /  Top News   /  Gold Futures’ Front-Month Breaks Beyond $2,000

Gold Futures’ Front-Month Breaks Beyond $2,000

imageCommodities14 hours ago (Aug 04, 2020 11:32AM ET)

By Barani Krishnan – U.S. gold futures’ front-month contract finally pierced the $2,000-an-ounce mark on Tuesday as the dollar resumed its fall after a brief respite, sending safe-haven seekers back toward the yellow metal.

The October gold contract on New York’s Comex settled up $35.20, or 1.8%, at $2,001.20. Its session peak of $2,014.15, meanwhile, set an all-new high for a benchmark gold futures contract on Comex.

Notwithstanding that, Comex’s December gold, which has attracted even more volume and open interest than October futures, surged even higher. December gold on Comex hit a record high of $2,207.30 before settling at $2,021, up $34.70 or 1.7% on the day.

“Gold is catching fire again on stimulus bets, some dollar weakness, and as risky assets get a boost on improving economic data and improving virus outlook,” Ed Moya, analyst at online trading platform OANDA said.

“Gold is now the favorite safe-haven as Treasury yields continue to slide. Real yields are deeper in negative territory and the U.S. could be one bad labor report from seeing the 10-year Treasury yield fall towards the March 9th record low of 0.318%.”

While gold is up more than 30% on the year, its rally took a backseat in recent days as the dollar climbed in anticipation of a positive U.S. nonfarm-payrolls report for July, due on Friday.

Doubts Now Over Friday’s Nonfarm Payrolls Data

Both the May and June issues of the nonfarm payrolls report had outsized U.S. jobs recovery from the Covid-19, thanks to the Labor Department’s revised methodology. For July, analysts polled by had an initial consensus for a 1.6 million-jobs gain — a forecast that boosted the dollar.

But even if the jobs data surprised to the upside, some say the Dollar Index, which pits the greenback against a basket of six competing currencies, will face more serious headwinds ahead.

“Overall, the U.S. dollar continues to look like a buy-on-dips scenario in the near-term,” said Jeffrey Halley, OANDA’s Sydney-based analyst.

Adds Halley:

“The price action in the bigger picture though, looks like a bullish correction to a longer-term bear market. A tentative global recovery, combined with negative U.S. real yields, multi-trillion-dollar deficits, bottomless free money from the Federal Reserve, along with electoral uncertainty Covid-19 concerns, does not make a compelling case for dollar strength.”

Silver, which rose alongside gold through most of July, was also swept up in Tuesday’s rally.

The white metal’s front-month contract on Comex, September, settled up $1.61 cents, or 6.2%, at $26.03 per ounce. September silver earlier hit a one-week high of $26.18.

Gold Futures’ Front-Month Breaks Beyond $2,000

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.