Gold Ends the Week Strong

APMEX

8/28/2020 8:35:23 AM

Gold Finishes Strong This Week

Gold has seen ups and downs over the course of this week. In the lead up to the Federal Reserve's Jackson Hole address on Thursday, the Precious Metal spiked to $1,981.51 before crashing to earth as profit taking drove prices down after the Fed's announcements. Many central banks around the world, including the Federal Reserve, want to keep interest rates low even if interest rates rise. Friday morning's Precious Metals market headed upwards due to that inclination. Economic recovery in many countries looks like it will be slower than expected, and that flexible and accommodating policy stance from central banks is a major force behind Gold's 28% rise this year.

The dollar has slipped over the course of the week, having its worst showing in a month. Hedge assets have become attractive to investors because of this weakness. Gold is on track to end the week up by almost 2%, while Silver gains 2%. Platinum and Palladium are also up.

U.S.-China relations continue to be frosty, though meetings between the two countries continued this week. The U.S. added more sanctions to Chinese companies in response to a renewed push in the disputed South China Sea.

Hurricane Laura made landfall midweek as one of the most powerful storms in U.S. history and continues inland. Now weakened to a tropical depression, it's headed north across Arkansas, where the governor has declared a state of emergency. Gulf Coast refineries and oil platforms have had to shut down due to the storm, putting a massive dent in production for the U.S.

A new oral test for COVID-19 this week promises faster and easier testing. The pandemic continues across the globe, keeping economies uncertain about the future.

Markets tested new highs this week as investors threw themselves into stocks, though news that Japanese PM Shinzo Abe was stepping down dropped the Nikkei on Friday.