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Gold & Silver Rally as Dollar Weakens on Outlook for Relief Package

Summary:
Futures for gold and silver headed to settle higher today, though they were swinging between gains and losses over the trading session. Platinum joined the rally, while copper fell and palladium demonstrated a substantial loss. Gold and many other dollar-denominated commodities rallied on the back of the dollar’s weakness on Thursday. Market analysts explained the poor performance of the greenback by hopes for a coronavirus relief package. While Congress has not approved the proposed bipartisan 8 billion relief bill yet, it looks like chances for the bill to pass are increasing with each day, at least according to reports. There are skeptics, who say that the proposed amount is nowhere near enough to propel the economy but it seems that markets are going to welcome whatever relief

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Futures for gold and silver headed to settle higher today, though they were swinging between gains and losses over the trading session. Platinum joined the rally, while copper fell and palladium demonstrated a substantial loss.

Gold and many other dollar-denominated commodities rallied on the back of the dollar’s weakness on Thursday. Market analysts explained the poor performance of the greenback by hopes for a coronavirus relief package. While Congress has not approved the proposed bipartisan $908 billion relief bill yet, it looks like chances for the bill to pass are increasing with each day, at least according to reports. There are skeptics, who say that the proposed amount is nowhere near enough to propel the economy but it seems that markets are going to welcome whatever relief the government is going to provide.

Adding to the traders’ optimism, which has hurt the US currency, was the news about the coronavirus vaccine development. Britain’s medical regulator approved one of the vaccines as safe for usage, and the United Kingdom will start inoculation next week. A couple of other vaccines are also close to completion. Some experts are doubtful, though, about the ability of such news to affect markets much. They argue that the vaccine has been already priced in, so any new positive developments will most likely have a limited impact. Instead, analysts offer to focus more on monetary and fiscal policies in developed countries, which can take the center stage in news in the near future.

Futures for delivery of gold in February rallied by $13.4 (0.73%) to $1,843.8 per troy ounce as of 19:57 GMT on COMEX today. Silver for delivery in March gained by $0.14 (0.56%) to $24.22 per ounce. Spot price for platinum jumped by $18.6 (1.83%) to $1,035.03 per ounce, while palladium crashed by $103.79 (4.3$) to $2,307.84 per ounce. March copper ticked down by $0.0025 (0.07%) to $3.4865 per pound.

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Vladimir Vyun
Vladimir is an online journalist with background in computer science and work experience in pension funds. He contributes news reports, fundamental analysis and sentiment forecasts to TopForexNews.com and CommodityBlog.com. His main specialization is the currencies of emerging economies and inter-market correlations with commodity and bond trading.

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