Gold Inches Higher on Weaker Dollar and Global Uncertainties


Nov. 20 2020, Updated 4:23 p.m. ET

Gold regained strength on Wednesday

After falling for two consecutive trading days, gold regained its strength on Wednesday, June 29, amid increasing concerns over the stability of the global markets.

At 1:56 PM EDT, the COMEX gold futures contract for August delivery was trading at $1,327.65 per ounce, a gain of ~0.72%. Silver was trading at ~$18.41 per ounce, an increase of ~2.9%.

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Global uncertainties increase demand for safe-haven investments

Britain’s vote to leave the European Union has sparked fears over the uncertainty of global economic health. Because of this, the Market is expecting the central banks to support the global economy. This has increased the demand for safe-haven assets such as gold.

Amid this weaker global economic situation, the odds of the Federal Reserve increasing interest rates were drastically reduced. The market players are even speculating on an interest rate cut by the Fed instead of an interest rate hike.

Amid these uncertain conditions, the holdings in gold-backed ETFs reached 1,940.3 tons on Tuesday, June 28—the highest level since September 2013. In addition to these factors, the weaker dollar also supported gold prices on Wednesday, June 29.

To learn more about how Brexit affected the precious metals markets, the demand for physical gold, and a look into how miners correlate to gold prices, please read How Has Britain’s Brexit Decision Affected Precious Metals?

At 2:23 PM EDT, Wednesday, June 29, precious metal producers Barrick Gold (ABX), Newmont Mining (NEM), First Majestic Silver (AG), and Royal Gold (RGLD) rose by ~1.9%, ~1.8%, ~4.4%, and ~3.6%, respectively. The SPDR Gold Trust ETF (GLD) rose by ~0.96%.

The final article in this series explores the performance of stocks related to metals and mining on June 29.


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