What’s happening: Gold and silver futures rose on Friday to record their sixth consecutive weekly gain.
What happened: With growing expectations for additional fiscal stimulus packages being announced by the US and Europe and concerns over the global economic outlook due to escalating covid-19 cases, precious metals continued their upward momentum last week.
The overall weakness in jewellery demand due to the pandemic was offset by investors looking for safe-haven options. Investments into precious metals also rose with the US dollar losing favour. The greenback, which is also considered a safe haven, has been on a downturn, with the US dollar index booking losses for the fourth consecutive week.
Why it matters: The White House is under immense pressure to announce further fiscal stimulus to shore up the markets with the current Federal CARES Act unemployment plan expiring by the end of the month.
Meanwhile, EU leaders commenced a two-day meeting on Friday to discuss a €750 billion recovery plan.
Last week was rife with vaccine headlines, with various pharma leaders announcing positive results from trials of their respective covid-19 candidates. Although equity markets posted overall gains for the week, but investor optimism remained constrained by news of record daily cases in the US.
Gold for August delivery rose 0.5% to end at $1,810 an ounce on the Comex on Friday, recording a weekly gain of 0.5%.
Gold prices had reached their highest level in around nine years earlier this month and are trading higher by 18.8% year to date.
September silver gained 1% to settle at $19.764 an ounce on Friday, surging 3.7% for the week.
Among other metals, September copper edged higher by 0.1% to $2.9045 per pound, rising 0.2% last week. October platinum gained 1.5% to $849.60 an ounce on Friday, recording a 0.4% gain for the week.
What to watch: With the US continuing to report a steep rise in daily covid-19 cases, the share of precious metals in investment portfolios support is expected to grow. Investors will continue to keep an eye on news related to progress with any vaccine or a drastic reduction in the number of infections. However, some profit taking is also possible given the persistent rise in precious metal prices over the past couple of months.