According to the results of Thursday, the June contract for precious metals jumped in price by $12.80, or 0.8%. Thus, the price of gold on the New York stock exchange COMEX reached $1,728.40 per troy ounce. Recall that the previous trading session also ended with a rise. The quotes of the classic asset increased by 1.8% on Wednesday.
Meanwhile, the other precious metals are also showing positive dynamics. On Thursday, the May silver contract added 1.7% to the price – the price of an ounce rose to $24.95. June palladium futures jumped 1.4% to close at almost $2,656. Platinum also boasted a similar gain: the price of its July contract increased 1.4% to $1,208.60. The only metal that went negative in the last session was copper. May futures fell 0.1%. Thus, the cost of 1 pound was $3.99.
Commodity analysts believe that the recent data on the number of initial applications for unemployment benefits in America could partially influence the movement of gold. The indicator increased by 61 thousand and thus did not meet the forecast of 675 thousand. The number of applications reached an unexpectedly high level of 719 thousand, which was the reason for gold to rush up.
Also, the growth catalyst at the moment is the fall in the USD index. The indicator, which shows the ratio of the US dollar to a basket of six major currencies, began to decline at the end of March, although it was on track for the largest quarterly increase since the summer of 2018.
In addition, the price of the precious metal was supported by a decrease in the yield of 10-year US treasury bonds. For the first 3 months of this year, the indicator showed the highest quarterly increase since 2016, but could not maintain the pace. It dropped from 1.7% to 1.6%.
On the contrary, for gold, the past quarter was the worst since 2016. Since the beginning of 2021, the yellow asset's quotes have shown the steepest peak in five years. But in the second quarter, the precious metal seems to have decided to recoup, especially since such fertile ground has been prepared for this. Rebalancing the market at the end of the quarter and closing short positions will help gold to recover and stimulate its further growth.
American bank Wells Fargo's analysts are sure that a gold rally this year can be expected. Experts analyzed the current situation on the yellow precious metal market and came to the conclusion that the supply of gold has already passed into the stage of shortage, and this, based on history, always serves as a starting point for a price rally.
Based on the observations of Wells Fargo, the classic asset is now close to the start of a new "super cycle" in the raw materials market. If the analysts' forecast of a period of rapid growth comes true, this "super cycle" will be the seventh in the history of gold since 1800. Otherwise, the current year will still be favorable for the yellow precious metal. The bank believes that gold will be able to continue the upward trend both amid a shortage of raw materials, and in connection with a variety of external factors that positively affect its pricing.
In particular, experts predict a further weakening of the US dollar, which will further strengthen the investment attractiveness of gold as the main safe-haven asset. In the event of a fall in the USD, the yellow precious metal will be able to reach $2,100-2,200 this year, Wells Fargo noted.
This optimism, however, is not shared by all commodity analysts. Some experts believe that the infrastructure plan of US President Joe Biden can exert strong pressure on gold in the short term. The main restraining factors for gold may be the recovery of the US economy, fiscal stimulus, and stabilization of the epidemiological situation due to successful vaccination.