At 21:59, spot Gold briefly rose more than $12 at $1782.58/oz; spot silver surged up to $27.5/oz, expanding to 2% intraday. the most active gold futures contract on the COMEX traded 10,378 lots in three minutes at 21:58-22:00 GMT, with the total value of contracts traded at more than $1.8 billion. The gold-silver ratio fell below 65, down 1.23% for the day.
By 22:50, spot gold tapped $1790/oz, up 0.81% intraday, also breaking the previous long/short turning point of 1778. Gold T+D moved higher, up 1% intraday, now at $373.85/g.
In addition, platinum futures stood at $1,300/oz, up 2.18% intraday. Copper LON surged 4% intraday to $8,896 per tonne, the highest level since September 2011. Spot copper advanced 4% intraday and is now at $4.0620/lb.
The post-Epidemic era has seen a synchronized rebound in the global economy and there are generally optimistic expectations for consumption in the market. This comes after Goldman Sachs’ latest report also raised its copper price target again, with 3-month, 6-month and 12-month targets raised to $9,200, $9,800 and $10,500 from the previous $8,500, $9,000 and $10,000. Goldman Sachs is even expected to see a supply gap of 327,000 tons of copper within this year, after which it will be in a long-term supply shortage. It is worth mentioning that Goldman Sachs’ 12-month target price of $10,500 has exceeded the all-Time high of $10,190 set by copper prices in 2011.
The performance was also eye-catching for bitcoin, which rose above $53,000 per coin at 22:46 to set another record high, up 2.5% in 24 hours. This comes after Musk defended tesla‘s $1.5 billion investment in bitcoin, saying it was a “not so stupid” form of liquidity.
Meanwhile, the U.S. dollar index continued to weaken during the day, now at 90.30, amid a rally in non-U.S. currencies.
Data released by the Federal Reserve yesterday showed that the size of the Fed’s balance sheet set a new record to $7.56 trillion as of Feb. 17, up $115.2 billion from the previous week, which is a practical demonstration of the Fed’s continued push for easing. U.S. Treasury Secretary Yellen‘s latest statement strongly supports the need for large fiscal stimulus in the United States. In addition, data released yesterday showed that initial jobless claims reached 861,000 last week, exceeding expectations by about 100,000 and the highest level in four weeks, the latest sign of a slowdown in the U.S. job market recovery.
These are all negative for the dollar, and analysts believe that if the dollar index effectively breaks below the 90 mark, it could be the start of a new round of dollar declines. The lower dollar has given the commodity market a respite.
However, the market should still be careful of the pressure on gold from U.S. bond yields.
If U.S. bond yields continue to rise on expectations of a larger U.S. fiscal stimulus package, the shorts could regain control.
James Hatzigiannis, chief market strategist at Ploutus Capital Advisors, said U.S. bond yields, a rising dollar, have hit gold hard in recent sessions, and the recent bitcoin boom may also have shifted some investment money from gold to cryptocurrencies. Hatzigiannis noted that for gold prices to re back above $1,800 per ounce, it must first allow U.S. bond yields to cool and confirm that the new crown epidemic is nearing its end.
But both of these conditions are a bit difficult to achieve at the moment, I’m afraid. The market expects Biden‘s $1.9 trillion to finally get through. In addition, the Washington Post recently reported that top Democrats have begun discussing a new $3 trillion spending plan, which includes detailed proposals for infrastructure, manufacturing revitalization and green energy previously proposed by Biden. This is a new plan that builds on Biden’s $1.9 trillion and the Trump-era $4 trillion bailout package. This news overnight has pushed the 10-year U.S. bond yield above 1.3% again.
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