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Gold Poised for Biggest One-Day Gain in August

August 20, 2018 at 16:59 by Andrew Moran

Gold futures are on track to record their biggest one-day gain in August as the yellow metal tries to return above the crucial $1,200 mark. Gold has been shedding its value, despite a myriad of global events that would typically be a boon for precious metals.

December gold futures surged $10.50, or 0.89%, to $1,194.70 per ounce at 16:25 GMT on Monday. Gold could lodge its largest single session jump this month. Gold prices, which posted a weekly loss of 0.5% last week, have been on a downward spiral since hitting a peak in April. Year-to-date, gold has tumbled more than 10%.

Silver, the sister commodity to gold, is also mustering up a rally to kick off the trading week. September silver futures rose $0.05, or 0.34%, to $14.68 an ounce. The white metal, suffering a steep weekly decline of 2% last week, has been having a down year, tumbling nearly 15% in 2018.

Gold is benefiting from a weaker greenback as the US dollar dipped 0.14% to 96.00. The buck endured a weekly drop of 0.4% last week, but it has strengthened for much of the year, negatively affecting dollar-denominated commodities. A stronger currency is bad for metals like gold and silver because it makes it more expensive for foreign investors to purchase.

However, analysts believe that gold might be gaining some support from investors who believe that yellow metal has bottomed out and want to take advantage of cheap prices. This could drive up gold as the summer winds down.

After months of the bears controlling the gold market, will the bulls take over?

Another aspect of gold’s recent strength has been signals that US-China trade tensions are easing. In recent months, the US dollar has soared throughout the trade spats, despite the world’s two biggest economies imposing tit-for-tat retaliatory tariffs. Also, the emerging market may be calming down as the Turkish financial crisis might have finally peaked in the wake of Washington’s levies on its steel and aluminum exports.

What has made the greenback’s story interesting this year is that it has been seen as a safe-haven asset, something that used to make gold attractive during times of instability and strife.

Traders will now look ahead to Friday when Federal Reserve Chair Jerome Powell delivers a speech at the annual retreat in Jackson Hole. Investors will comb through his prepared remarks to find any hints regarding interest rates and other monetary policy maneuvers.

The rest of the metals market is seeing green. December copper futures advanced $0.035, or 1.35%, to $2.68 per pound. September platinum futures jumped $15.70, or 2.02%, to $793.00 an ounce. September palladium futures added $21.20, or 2.42%, to $899.00 per ounce.

If you have any questions and comments on commodities today, use the form below to reply.

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