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Gold poised for third weekly advance on recovery headwinds

Silver, palladium and platinum fell.
Image: Christopher Pike/Bloomberg

Gold is heading for a third weekly advance, with the haven metal gaining on anxiety about the spread of Covid-19 variants and the prospect of prolonged dovish monetary policy.

Bullion is winning back investors after a bleak June, with fears that the world’s exit from the pandemic may be more fraught than anticipated. Renewed virus fears around the world are a boon for bullion because they may mean governments must extend monetary support to still-fragile economies.

Those risks were underscored this week by Federal Reserve minutes that highlighted continued uncertainties, and on Thursday by a rise in US jobless claims. China’s surprise hint that it could unleash more liquidity to the economy also added to the sense that headwinds to a global recovery remain strong.

“Commodities came under pressure as policy makers around the world flagged risk to their economies from rising cases of Covid-19 variants,” Australia & New Zealand Banking Group Ltd. said in a note. “Demand for safe haven assets rose following a lift in US initial jobless claims.”

Gold was little changed at $1 800.65 an ounce by 6:58 a.m. in London, for a 0.8% gain so far this week. Silver, palladium and platinum fell.

© 2021 Bloomberg

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It’s more a case of whatever happens next will be good for any remaining safe havens. Both inflation or deflation, rates higher or lower, bigger bubble or any size of bust. The fog is lifting and the truth of the impossible-to-fix man-made Lehman triggered systemic rupture is a pill that eventually can only kill the patient. The slight-of-hand liquidity tap, insane Fed speak along with the flagging beneficial effects and ever-increasing ill effects from massive and patently immoral market pumping are causing increasing unrest, nervousness and caution. Stockpiling of non-perishables enables selective price manipulation and prospective sector domination. The US sits like a deer in the headlights and can only share its irreparable woes with the entire planet.

FED talk talk vs solid Gold. I will take the Gold and PGM(s), they are oversold.

Covid-19 numbers are picking up, the US is over spending for the next 20 years (30% more Dollars printed).

End of comments.

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