On Friday, precious safe-haven gold contracts’ prices alongside other precious metals had been hit with a heavy whiplash as political tensions were fading away in the Capitol hill over prospects of a smooth transition of power in Washington on December 20, while a sustained upswing in US Treasury yields had compounded the narratives further for precious metals.
In point of fact, after the US President Donald Trump had said in a statement that there would be a smooth transition of power in Washington as scheduled, almost all of the precious metal futures’ prices had beaten a hasty retreat with safe-haven gold futures plunging 4 per cent that followed a sharp downward spiral in silver futures’ prices which had jolted as much as 10 per cent, while palladium contracts had marked up their worst week since November last year.
If truth is to be told, confirmation of a Democrat-led Senate alongside a lower house in the US Congress following fiercely contested twin Senate runoffs in Georgia on January 5, had spurred up investors’ optimism on cloud nine over hopes of a larger fiscal package, while a remark from the US President-elect Joe Biden later last week that the fiscal packages would streamline an influx of trillions of dollars into the US economy, had added to further bullish wind on market participants’ hope.
Precious gold, silver slumped as political tensions wane in Washington
Citing statistics, with the precious yellow metal sharply losing its safe-haven bid amid growing optimism of a larger stimulus package, spot gold futures’ prices plunged 3.6 per cent to $1,843.06 an ounce, marking up their worst week since November last year, while US gold futures’ prices jolted as much as 4.1 per cent to settle down at $1,835.40.
Among other precious metals, silver was slumped 7.3 per cent to $25.14 an ounce after falling as much as 9.8 per cent earlier in the day, while palladium and platinum futures’ prices eased off 2.6 per cent and 5 per cent respectively to $2,356.23 an ounce and $1,060.87 an ounce.
On the week, spot gold futures’ prices faltered 2.64 per cent, while silver contracts wrapped up the week down by 3.54 per cent. Meanwhile, addressing to a lacklustre physique for gold futures’ prices in a near- to intermediate-term outlook, a senior market analyst at OANDA, Edward Moya said, “Gold is having a major fundamental shift for many investors and they’re starting to abandon their safe haven trade.
You’re probably going to see that the Treasury market sees some strong flows and that’s taking away some of the appeal from gold. ”