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Metals Gain as Dollar Falls, Gold Remains Under Pressure

February 19, 2021 at 17:52 by Vladimir Vyun

Metals rallied today as risk appetite among investors drove the US dollar lower, boosting commodities priced in the US currency. As it has been happening throughout this week, gold struggled to join other metals in a rally. While the yellow metal managed to eke out some gains, they were very mild compared to those of other metals, in particular copper.

Market analysts explained that fundamentals remained generally negative to bullion. The positive market sentiment, which has been driving the greenback lower, limited the appeal of gold as a safe haven. And rising US Treasury yields as well as the rally of European and American stocks further diminished the attractiveness of the non-yield-bearing commodity to investors.

Meanwhile, metals used in industry, especially copper, profited from traders’ optimism about the global economy. The positive economic outlook suggests that consumption of the industrial metal should increase as economies around the world resume their industries. At the same time, supply disruptions caused by the COVID-19 pandemic can limit the amount of metal available on the market. Specialists pointed out that copper inventories tracked by the London Metal Exchange were close to the lowest level since 2005. Another reason for the sharp advance of copper prices was the return of Chinese traders to the market after the Lunar New Year holiday.

Futures for delivery of gold in April rose by $6.8 (0.38%) to $1,781.8 per troy ounce as of 17:49 GMT on COMEX today. Silver for delivery in March climbed by $0.42 (1.54%) to $27.54 per ounce. Spot price for platinum advanced by $11.48 (0.9%) to $1,287.3 per ounce, and palladium rallied by $16.03 (0.68%) to $2,374.78 per ounce. Copper for delivery in May surged by $0.164 (4.2%) to $4.071 per pound, rising above the $4 level for the first time in a decade.

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