Gold futures closed higher on Friday (April 8) as investors bought gold as a safe haven amid concerns about inflation and recession.
- Gold futures were up $7.8, or 0.4%, at $1,945.6/ounce. and rose 1.1% this week.
- Silver futures were up 8.8 cents, or 0.36%, at $24.823 an ounce.
- The platinum contract was up $17.6, or 1.84%, at $975.6 per ounce.
- The palladium futures were up $197.00, or 8.9 percent, at $2,420.10 an ounce.
Gold contracts rose, while the dollar also strengthened. The dollar normally moves in the opposite direction to the gold price.
Uncertainty about the Federal Reserve’s (Fed) monetary policy outlook, recession worries and inflationary pressures encouraged investors to buy safe havens such as gold or silver.
The problem that investors are racking their brains over is the inversion of the U.S. government yield curve. Every time this has happened so far, a recession has broken out about 18 months later. If this were to happen, combined with the Fed’s intention to raise interest rates and reduce its balance sheet, it could lead to a severe recession. The last time this happened was in 2019, when the repo market froze overnight as interest rates briefly rose above 10%. With the COVID pandemic, the Fed then had a good reason to expand its QE.
In addition, concerns about the conflict between Russia and Ukraine and rising inflation have led investors to buy gold contracts.
Gold contracts rose after a U.S. general said the Russian-Ukrainian conflict could last for years.
Investors will await the release of the Consumer Price Index (CPI) for March next week, which is expected to rise above 8%.
According to the U.S. Commerce Department, wholesale inventories rose 2.5% in February from the previous month, following a 1.2% increase in January, and 19.9% in February from a year earlier.
The Spot Market is Closed
Saturday, April 9, 2022