Gold was up in commodities on Friday morning, due to the U.S. Federal Reserve’s new monetary policy. However, overshadowing this positive, there was data suggesting a COVID-19-induced economic slump.
Gold futures were up 0.80% at $1,948.
Fed Chairman Jerome Powell unveiled the central bank’s new monetary policy strategy. This was during his speech at the Jackson Hole symposium on Thursday.
The strategy’s objective is to address shortfalls from the broad-based and inclusive goal of full employment. It promises to aim for 2% inflation on average.
Gold initially faced pressure. Longer-term U.S. Treasury yields rose to their highest level in months and strengthened the dollar.
U.S. data released on Thursday showed that 1.006 million initial jobless claims were filed over the past week. Over this fact, gains were capped for fears of a stall in the labor market recovery.
The number of COVID-19 cases continue their unceasing rise. More than 24.4 million cases globally were recorded as of August 28, according to Johns Hopkins University data.
The U.S. Congress still has not reached a consensus over the latest stimulus measures. U.S. House of Representatives Speaker Nancy Pelosi and White House Chief of Staff Mark Meadows haven’t reached an agreement.
On Energy Commodities
Meanwhile, in commodity news, oil tanker group Frontline reported a big jump in second-quarter earnings on Thursday. Energy traders paid to store crude that went unsold amid the COVID-19 pandemic.
Frontline’s April-June adjusted net profit rose to $206.1 million from last year’s $4.2 million. This topped a forecast of $203.3 million in a poll of analysts.
Chief Executive Robert Hvide Macleod said the results for the first half of 2020 were their strongest in over 10 years.
The crude oil market went into contango, at the same time. Compared to the near term, prices for future delivery were significantly higher. Thus, this further encouraging traders to store oil on vessels.
Tankers known as very large crude carriers generated on average $75,800 per day in the second quarter, Frontline said. Thus was up from just $25,600 per day in the same quarter of 2019.
The freight market for oil has since subsided, however, as the global crude output declined. It made the outlook for shipping rates less predictable, the company added.
Oil consumption plummeted in the first half of 2020. Global output was curtailed by the OPEC+ group and other countries.
Still, energy companies were left with significantly more crude than they could sell.
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