Metals Weekly Round-Up: Gold Supported by Weaker Dollar

A second week of softening bond yields and a declining US dollar pushed gold higher.

By Friday (April 16), the yellow metal was on track for another weekly gain, adding 2.4 percent from its Monday (April 12) value to reach US$1,736.50 per ounce.

The move reversed consecutive losses that forced the metal below the US$1,700 level in March.

There may be more upside in gold’s future as 10 year Treasury yields continue to face headwinds.

“We’ve seen that the 10-year yield has pulled back and has broken through that very important 1.6 percent level… that probably means there is more weakness in yields, at least near term, which is very supportive for gold,” Ilya Spivak, currency strategist at DailyFX, told Reuters.

As economies in the US and China grow, gold is anticipated to benefit from inflationary tones.

An ounce of gold was priced at US$1,779.75 as of 11:16 a.m. EDT on Friday (April 16).

Gold’s positivity aided an uptick in silver for the second full week of April. But despite moving north of US$26 per ounce, the white metal is still more than US$2 off its year-to-date high.

Strong investor interest early in Q1 propelled prices to US$28.55, but the higher value was unsustainable.

During an interview, Ed Steer of Ed Steer’s Gold and Silver Digest explained why the rush by retail buyers to purchase physical silver hasn’t resulted in significant price growth.

“They’re certainly having an impact … as far as the physical market is concerned, but as far as the short position that exists in the COMEX futures market, it doesn’t make any difference at all,” he told the Investing News Network (INN).

Listen to Steer explain what’s going on in the silver market.

At 11:38 a.m. EDT on Friday, silver was trading for US$26.04.

Platinum and palladium also made gains over the five day period. Positive economic outlooks paired with heightening emissions standards bode well for both automotive metals.

As of Friday at 11:40 a.m. EDT, platinum was valued at US$1,198 per ounce and palladium was selling for US$2,668 per ounce.

The base metals also registered a broad gain this week, driven higher by China’s economic recovery and growth in the industrial space.

“More of the base metals have broken out of their consolidation patterns to the upside, with nickel and zinc the ones remaining range bound for now,” a Fastmarkets note reads. “Underlying conditions look strong because prices have held up well over the past weeks and months when prices have been consolidating — with dips for the most part being limited.”

Copper is set to end the week up more than 3 percent from its Monday value of US$8,901 per tonne.

Now sitting at the US$9,000 range, Nick Pickens of Open Mineral believes the red metal will remain rangebound, as the trends driving it have not changed.

“Healthy demand in China and government stimulus are supporting investor sentiment and hopes of a strong, green recovery. Meanwhile, the expected supply mine growth is stuttering,” he told INN.

Zinc rose modestly, climbing from US$2,759 per tonne at the start of the session to US$2,809 by Friday.

Of the base metals, nickel was the only one on the decline this waeek. After a strong start, the metal fell from US$16,220 per tonne to US$16,049 by week’s end.

As zinc pulled back, lead was able to edge a slightly higher. Monday saw the versatile metal priced at US$1,948.50 per tonne, and by Friday values had grown to US$1,984.50.

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Securities Disclosure: I, Georgia Williams, hold no direct investment interest in any company mentioned in this article.

Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.