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Gold Posts Losses Despite Risk Aversion

May 1, 2020 at 9:41 by Vladimir Vyun

Markets remained in a cautious mood, preferring to avoid risk. That led to a widespread decline of commodities, with the Bloomberg Commodity Index falling about 1%. Losses were registered on all commodity markets, be it energy, metal, or agricultural commodities. Usually, gold thrives in such an environment but that was not the case today. One of the possible reasons for that was that bullion seemingly loses its appeal as a safe haven, and investors prefer other assets, like the US dollar, for use as a refuge.

Still, many market analysts believe that pessimism and risk aversion will continue to support the metal in the longer term. Risk appetite, caused by hopes for a cure for the COVID-19 and an exit from lockdown, was short-lived as investors were contemplating the ramifications of the global pandemic to the world’s economy. US President Donald Trump was not helping the matter, accusing China of engineering the coronavirus and threatening to punish the Asian country for this. China retaliated with accusations of the USA for the spread of the virus. The conflict between the world’s two biggest economies definitely does not improve the investors’ confidence and threaten to derail the recovery of the global economy after the pandemic subsides.

Futures for delivery of gold in June dropped by $15.2 (0.9%) to $1,679 per troy ounce as of 9:39 GMT on COMEX today. July silver slipped by $0.03 (0.19%) to $14.95 per ounce. Spot price for platinum declined by $12.81 (1.65%) to $764.3 per ounce, and palladium lost as much as $43.68 (2.22%) of its value to trade at $1,927.11 per ounce. Copper for delivery in July tumbled by $0.047 (2.01%) to $2.297 per pound.

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