This week, gold and silver made significant gains as the safe haven asset class is very supportive. Rising geopolitical tensions, recent declines in yields on 10-year treasury notes, weaknesses in the dollar, a very accommodating Federal Reserve and concerns about rising national debt have moved gold and silver together to multi-week highs.
The last time gold was traded at $ 1784 was on February 25th. On that date, gold opened above $ 1800 and closed at $ 1775. The last time gold closed above today’s highs was on 22 February. This week, gold opened at $ 1745 and earned about $ 30 based on closing today.
As of 16:30 EST, the gold futures contract the most active Comex contract in June 2021 is currently trading at $ 9.80 (+ 0.55%) and is set at $ 1776.60. Silver base, the most active Comex contract in May 2021, is currently trading at $ 0.061 (+ 0.23%) and is set at $ 26,025. This follows the strong increase in yeast in both precious metals. As it is on Thursday, gold futures earned $ 28.10 and silver futures $ 0.40.
Dollar weakness provided light upwind as the dollar index is currently set at 91.54. The dollar traded at 92.21 on Monday and lost 67 points this week. As a result, the dollar index was devalued by -0.067% this week.
The US 10-year treasury bond traded lower this week and now yields about 1.56%. The decline this week also provided solid tailwinds that help the safe haven asset class.
On Wednesday, April 14, President Jerome Powell virtually spoke at the Washington DC Economic Club. He has raised the concerns of many economists about the growing national debt arising from fiscal stimulus, as well as the monetary policy of the Federal Reserve.
In response to these concerns, President Powell said: “The US federal budget is on an unsustainable path, which means that debt is growing significantly faster than the economy. The current level of debt is very sustainable. And our ability is undetectable. to service and issue that debt for the foreseeable future. ‘
In addition, there is increasing tension between the United States and Russia. President Joe Biden yesterday signed an executive order imposing new sanctions on Russia, based on information indicating that they are interfering with our election, as well as a greater amount of internet hacking and other ‘malicious activities’, including sending additional troops to Ukraine, as well as the continuation of persecution of Russian dissidents in detail to Alexei Navalny.
In response to these issues, the White House has issued an ‘Executive Order on the Blocking of Property in Relation to Specific Harmful Foreign Activities of the Government of the Russian Federation’. The full executive order can be read by following this link.
There is also increased tension with China. President Joe Biden met with Japanese Prime Minister Yoshihide Suga today. According to CNBC, “the two leaders will meet in Washington to be the US president’s first summit with a foreign leader since his inauguration in January. The meeting comes as the US seeks to challenge China on issues ranging from human rights to unfair trade practices.”
These events together were the driving force behind moving gold and silver to gain value this week. Even if it is equal, they can continue to drive gold above $ 1800 per ounce and silver above $ 28 per ounce.
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