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Gold Down but Set to Record Weekly Rise Over Weaker Dollar, Inflation Concerns

CommoditiesMay 21, 2021 12:10AM ET
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By Gina Lee

Investing.com – Gold was down on Friday morning in Asia as an improving economic outlook broadened investors’ risk appetite. However, a weaker dollar and growing inflationary pressure capped losses and set the yellow metal on track for a third consecutive weekly rise.

Gold futures were down 0.38% to $1,874.75 by 12:03 PM ET (4:03 AM GMT); The dollar, which usually moves inversely to gold, inched down on Friday and was headed towards a weekly loss.

The benchmark 10-year U.S. Treasury yield also fell to 1.6340% during the previous session thanks to disappointing demand for Thursday’s auction of 10-year Treasury Inflation-Protected Securities.

Hopes of a quick economic recovery were further strengthened by strong jobs data out of the U.S. on Thursday. The past week saw 444,000 initial jobless claims filed, the lowest number since March 2020.

In Asia-Pacific, Japanese core consumer prices slid for the ninth consecutive month in April, with a record slump in cellphone fees offset by rising energy prices. The National Core Consumer Price Index (CPI) contracted 0.1% year-on-year while the National CPI contracted 0.4% month-on-month.

Elsewhere in the region, Australia released retail sales data for April earlier in the day.

Investors also await a slew of U.K. economic data due to be released later in the day, which include April retail sales as well as the composite, manufacturing and services purchasing managers’ indexes for May.

SPDR Gold Trust (P:GLD), the largest gold-backed exchange-traded fund globally, said that its holdings rose 0.6% to 1,037.09 tons on Thursday from 1,031.27 tons the day before.

In other precious metals, palladium gained 0.5% and platinum rose 0.4%, while silver eased 0.1%.

Gold Down but Set to Record Weekly Rise Over Weaker Dollar, Inflation Concerns
 

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David Smith
David Smith May 21, 2021 11:59AM ET
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"1,037.09 tons" Gina Lee, would you be able to provide any verifiable evidence to support these gold holding claims? How reliable are GLD's holding reports? GLD does not give retail investors the right to redeem for any of its mystery physical gold holdings. This fact alone ensures the GLD shares to be nothing more than paper at the end of the day. GLD also has a glaring audit loophole in their prospectus that states they have no right to audit subcustodial gold holdings. To this day, I have not heard of a single good reason for the existence of this backdoor to the fund.  I remember there was a highly publicized visit by CNBC's Bob Pisani to GLD's gold vault. This visit was organized by GLD's management to prove the existence of GLD's gold but the gold bar held up by Mr. Pisani had the serial number ZJ6752 which did not appear on the most recent bar list at that time. It was later discovered that this "GLD" bar was actually owned by ETF Securities.
David Smith
David Smith May 21, 2021 11:59AM ET
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Note that even on the subject of GLD's insurance, they are not at all straightforward about it. Their representatives will not confirm nor deny the existence of GLD's insurance. I recommend anyone curious about this to confirm via calling GLD's publicly listed number for general inquiries at 866 320 4053 and ask about this clause from the GLD prospectus: "The Custodian maintains insurance with regard to its business on such terms and conditions as it considers appropriate which does not cover the full amount of gold held in custody." Exactly how much of the fund is insured? They will not give you a straight answer and might even throw in some bizarre excuse which I've experienced. Why hide this information from investors? The people behind GLD certainly do not seem like the most honest types.
AIM Investor Journal
AIM Investor Journal May 21, 2021 9:51AM ET
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Huge swing happening, funds out of cryptocurrencies and tech stocks into retail and base metal mining. Inflation will drive commodities higher and taxes on cryptos and tech (offshore acc, profits) likely to be the trend for the remainder of this year
 
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