Gold prices advanced on Monday to settle above $2,000 an ounce for the first time in three weeks, bolstered by a weaker U.S. dollar and a decline by U.S. Treasury yields after Saudi Arabia and other OPEC+ producers announced surprise oil production cuts of more than 1 million barrels a day starting in May.
The June gold contract
rose by $14.20, or 0.7%, to settle at $2,000.40 an ounce on Comex. That was the highest settlement for the yellow metal since March 10, according to Dow Jones Market Data.
Silver futures expiring in May
fell by 13 cents, or 0.6%, to end at $24.02 an ounce.
declined by $10, or 0.7%, to finish at $1,458 an ounce, while July platinum
fell by $6.70, or 0.7%, to end at $996.40 an ounce.
May copper futures
declined by 5 cents, or 1.2%, to settle at $4.05 a pound.
Gold initially traded lower on Monday morning as the strength of the greenback weighed on the prospects of the yellow metal after Saudi Arabia led a surprise oil-production cut across OPEC+ member countries that will slash oil output by 1.16 million barrels per day starting in May.
However, the precious metal reversed its losses and rallied to settle at the highest level in three weeks as traders realized that “in the end nothing good can happen if oil prices continue to rise,” said Edward Moya, senior market analyst at OANDA.
“Demand for safe-havens appears to be elevated and that should be good news for gold.”
rallied over 6% on Monday, but remain down around 19% from 12 months ago.
The ICE U.S. Dollar Index
a gauge of the dollar’s strength against a basket of rivals, was down 0.3% at 102.17, after trading above 103 earlier in the session.
“Inflation fears have started to rise after OPEC decided to cut production. There are buyers on dips. A weaker U.S. dollar today and the rise from the days low added to the price rise,” said Chintan Karnani, director of research at Insignia Consultants.
“A daily close over $2,000 today and tomorrow will cause a short covering rally and a move to $2120. Momentum and sentiment is very bullish. Only a very strong March jobs numbers will cause a sell off in gold. Incoming news will be the key before the Easter Vacation,” Karnani said in emailed comments.
In U.S. economic data, the Institute for Supply Management’s manufacturing index dropped to 46.3% from 47.7% in the prior month. That’s the lowest level since May 2020 and reflecting a continuing struggle by a key part of the economy to resume growth.
The U.S. Labor Department will release its monthly jobs report on Friday.
— Myra P. Saefong contributed to this article