Gold is looking to be a safe haven for investors as the dollar weakens on lackluster US data from last Month. Gold manages to shrug some of the loss after geopolitical terrors from North Korea’s nuclear activity over the weekend; silver also manages to scoop some positivity on a weaker dollar. On the other hand, copper looks to be wobbly on the recent holdup on China’s industrial output.
Gold’s Future Surges, Hits 4-Day High
Gold’s future for June was skyrocketing today, it was up by 0.5% or $5.00 to $1,234.90 an ounce; the commodity also manages to have one of its strongest finishes at $1,230 yesterday speeds over May 3’s record. Today’s increase marks a 4-day surge for gold, according to Mark To, head of research at Hong Kong’s Wing Fung Financial Group, "In the shorter term it (weaker U.S. data) could lift gold prices to a certain extent as it ensures the pace of the interest rate hikes do not accelerate,"
The weaker-than-expected US manufacturing data gave the dollar a struggling weak start; this then translates to investors flocking over at commodities. While this is all happening, a looming threat in the form of another geopolitical tension after North Korea’s missile launch; this can add pressure on the commodity prices.
Silver and Copper
Silver is also looking to be hot this couple of days, with significant gains last Monday and I now on a 4-day run as well. It opens as strong as gold does, and with the underperforming US data for April pushing the dollar to the edge, it can only spell a surging week for silver Nirmal Bank Commodities noted that, “We expect prices to trade range bound for the day, with the dollar easing after weak US manufacturing data dented expectations of an aggressive string of interest rate hikes by the US Federal Reserve.”
Meanwhile, copper is looking to be a bit more unstable as copper futures on the Comex were down by 0.43% to $2.528 a pound. The weaker copper is mostly due China’s dull industrial production, it gained 6.5% a 1% lower from the expected 7.5%; China is on par with India when it comes to world copper demand, making up a 40% for both companies.
Weak Dollar Boosts Commodities
According to a market analyst of Hantec Markets Richard Perry, the dollar is “coming under increasing corrective pressure amidst data disappointment and more concern over Trump,” the ICE dollar index losses 0.4% to 98.515, hitting its lowest level ever since November 10 of last year. The greenback is also losing a battle against a long-time competitor, the yen; the US currency decline at 113.60 yen from 113.79 yen yesterday.
One battle that the dollar is also currently losing is with euro; the EURUSD sets off opening Tuesday market at $1.1056 from $1.0975 on Monday, this also signifies a new high for the currency overtaking November’s gains. According to Morgan Stanley’s analysts, “the euro has upside potential from here, but for now, we would regard a higher euro as a cross trade”
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