By Barani Krishnan
Investing.com – One day — that’s all the bears in gold could manage in keeping gold prices down as the yellow metal bounced back Friday from a brief selloff across markets forced by the shock collapse of U.S. gross domestic product in the second quarter.
“Gold mania continues and after tentatively clearing the $2,000 level, traders are starting to doubt whether a profit-taking pullback is in the cards,” said Ed Moya, an analyst at New York-based online trading platform OANDA.
, a real-time indicator of trades in bullion, was up $15.70, or 0.8%, at $1,972.34 by 2:25 PM ET (18:25 GMT). It fell a meager 0.6% in the previous session, touching a session low of $1,939.69 that remained well above the level it attained when it rewrote for the first time this week record highs from 2011.
On New York’s Comex, settled up $20.50, or 1.1%, at $1,962.80 before expiring and going off the board. On Thursday, August fell just 0.5%. For July, Comex gold ended up 9%, for its biggest monthly gain since February 2015. For the year, gold futures are up almost 30%.
That aside, Comex’s December contract — which will be its benchmark from next week — settled on Friday at $1,985.90. That means gold traders will see an automatic gain of $23 on the front-month when the market reopens Monday.
Further, December gold hit a record high of $2,005.40 in Friday’s Asian session, before the start of European and U.S. trading. That also means the new front-month for Comex would likely aim for a higher peak in the new week to sate gold bulls pursuing $2,000-territory.
Friday’s rebound came as the passage of a new $1 trillion coronavirus relief bill in the U.S. Congress was being held up by brawling between the Trump administration and rival Democrats on whether weekly benefits for the unemployed should remain at $600 or be cut to a third that amount, as the administration hopes.
“Safe-haven demand remains strong as Congress and the White House continue to struggle to break the impasse on extending emergency unemployment benefits,” Moya said.
“Gold will continue to shine bright as real yields continue to fall deeper into negative territory, virus surges will keep economic recoveries limited, and the stimulus trade will not go away until the labor market bounces strongly back.”
Silver, which rallied along with gold through most of July, rose 35% for the year, outperforming not just the yellow metal but the entire commodities complex as well.
Silver’s front-month contract on Comex, , settled up 85.40 cents, or 3.7%, on Friday at $24.22 per ounce.
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