Gold futures on Monday were headed higher in commodities to start the week, even as global equity markets were seeing sharp gains.
Commodity experts attribute some of the buying in bullion to opportunistic investing. This was after the metal registered its first back-to-back weekly loss since March on Friday.
Jim Wyckoff, senior analyst at Kitco wrote that gold prices are higher Monday morning. This was due to some perceived bargain hunting, as prices have backed down from the record highs, scored in early August. They are trading below $2,000. He noted that a weaker U.S. dollar index on Monday was also aiding the precious metals market bulls.
The U.S. dollar was off 0.4% against a half-dozen rivals. This was measured by the ICE U.S. Dollar DXY, -0.35%.
The buck notched a weekly gain of 0.2% last week. It produced a headwind for gold buyers.
Craig Erlam, senior market analyst at Oanda wrote that Gold is a little higher. It was trading around $1,950 this morning, with the weaker dollar giving it some reprieve.
He added that, the rebound in the greenback really took the wind out of the sails of the gold recovery trade just as it was trying to break $2,000 again.
Gains for Gold and Silver
December gold GCZ20, +0.77% GC00, +0.77% gained $13.90, or 0.7%, to reach $1,960.80/ounce. This was after marking a weekly decline of 0.1%, based on last Friday’s settlement for the most-active contract.
That’s a sufficient decline for the second straight weekly drop since a similar stretch ended on March 20, according to FactSet data.
Meanwhile, in commodity news, September silver prices SIU 20, +1.69% rose 55 cents, or 2.1%, to $27.255/ounce. The metal notched a weekly decline of 3% on Friday, based on the most active contract.
Gains for gold and silver came as the Food and Drug Administration on Sunday said it authorized use of convalescent plasma. This is the antibody-rich blood component from recovered COVID-19 patients, for the treatment of severe coronavirus cases.
This was giving some life to risky assets like stocks.
Precious metals have been viewed as a hedge against the uncertainty fostered by the COVID-19 pandemic. This includes the trillions that central banks and governments have spent to limit the debilitating impact on businesses globally.
Medical experts said the treatment might provide benefits to those battling the disease. But there isn’t conclusive evidence of its effectiveness.
Meanwhile, questions remain about dosage and when it should be administered.