Dollar Value Puts Pressure on Gold
APMEX
8/21/2020 8:24:06 AM
Dollar Value Pressures Gold
Gold went back over $2,000 briefly this week, but a slide from Wednesday on has left the Precious Metal hovering around $1,950 per ounce. News reports on Monday confirmed that Berkshire Hathaway had moved a significant chunk of assets away from banks and into Barrick Gold, which prompted a flurry of buying. Warren Buffett is known for his skepticism about precious metals, so even purchase of a mining stock is out of the ordinary.
Tensions between China and the U.S. have not abated and trade talks have been put on hold. U.S. President Donald Trump added more sanctions to Chinese company Huawei early in the week. Concerns about spying through Huawei’s 5G devices has pushed several countries to enact sanctions and controls.
The U.S. Federal Reserve released minutes late Wednesday that detailed their plans for the coming months. They are not as optimistic about the economy as some thought they would be. Still, the Fed is not planning to use yield-curve control to keep interest rates low. The dollar has gained ground this week on that news. This is one of the main factors that has kept Gold lower — safe havens like Treasury bonds often have an inverse relationship to Precious Metal safe haven assets.
European markets slowed due to COVID-19 concerns. Travel restrictions and consumer fears have kept the Eurozone economy down, but it hasn’t slowed the U.K., which saw retail sales rise higher than their pre-virus levels.
Meanwhile Pfizer and BioNTech plan to put an early COVID-19 vaccine in the hands of regulators by October. This is one of the earliest vaccines that would be available. U.S. cases are slowing across the Sun Belt and the CDC says they may drop next week.
APMEX Market Reports provide our readers with a review of spot price activity and some of the factors that may be affecting the market for Precious Metals. While the information is obtained from sources we believe to be reliable, we do not guarantee its accuracy or its completeness and we encourage you to conduct your own investigation prior to making any decision based on the information. The Market Reports are not intended as a comprehensive discussion and there may be other factors affecting the financial marketplace. These Market Reports are provided for informational purposes only and do not constitute a recommendation by APMEX to hold, purchase or sell any Precious Metal product. All orders, purchases and sales, if any, are subject to the terms of the User Agreement and other applicable policies
