On Thursday, April 20, gold futures closed higher, buoyed by a weaker dollar and an influx of investors seeking safe assets amidst concerns about a possible recession. Gold futures rose by $11.80, or 0.59%, to reach $2,019.10 per ounce.
The rise in gold futures was accompanied by modest gains in other precious metals. Silver futures rose by 0.20 cents, or 0.01%, to reach $25.373 per ounce. Platinum futures rose by $1.90, or 0.17%, to reach $1,107.60 per ounce. Palladium futures, on the other hand, fell by $30.10, or 1.9%, to settle at $1,588.70 an ounce.
The depreciation of the US dollar, which fell by 0.12% against a basket of six major currencies to 101.8493 overnight, contributed to the increase in gold futures. The weaker dollar makes gold contracts, which are priced in dollars, less expensive for investors holding other currencies.
Investors also sought safe assets such as gold amidst concerns about the US economy. On Wednesday, the Federal Reserve released a summary of economic conditions in all 12 districts, or Beige Book, which stated that the US economy has been stagnant in recent weeks, with employment slowing down and commercial banks tightening lending standards after the recent banking crisis.
Furthermore, the Labor Department reported that initial claims for unemployment benefits rose by 5,000 to a seasonally adjusted 245,000 last week, exceeding analysts’ expectations of 240,000. The National Association of Realtors (NAR) also reported that existing home sales fell by 2.4% to 4.4 million units in March, both month-over-month and year-over-year, due to rising mortgage interest rates.
In light of these concerns, investors are increasingly turning to gold as a safe asset, contributing to the rise in gold futures.
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Friday, April 21, 2023