Gold futures edged higher Tuesday, a day after finishing at its lowest since late February as a flight to quality left the yellow metal behind.
Gold for June delivery
rose $9.40, or 0.5%, to $1,905.40 an ounce on Comex after closing Monday at its lowest since Feb. 25 following a 2.1% decline last week. May silver
gained 6 cents, or 0.3%, to finish at $23.73 an ounce.
Global equities slumped Monday as investors reacted to fears of a potential lockdown of Beijing as Chinese authorities responded to a rise in COVID-19 cases, though U.S. stocks later bounced back to end the day in positive territory. Gold, often viewed as a haven during periods of market volatility, failed to find support as investors piled into Treasurys and other havens.
But Daniel Briesemann, analyst at Commerzbank, argued that the Monday slump was likely the result of forced selling as well as a stronger U.S. dollar.
“During such market phases in the past, gold would often come under pressure because gold would be sold to offset losses elsewhere,” he said, in a note. “Yesterday, for example, saw considerable pressure on stock markets for some of the time. Gold has at least regained the $1,900 per troy ounce mark this morning.”
Briesemann said gold is likely to be well supported and will reassert its status as a safe haven and an inflation hedge.
In other metals trade, May copper
rose 0.8% to $4.483 a pound.July platinum
rose 1.2% to $916.20 an ounce, while June palladium
bounced 1.8% to trade at $2,160.50 an ounce after concerns over China sent the metal down 10.7% in Monday’s session.