(Bloomberg) — Gold headed for back-to-back gains as investors weighed the outlook for the metal’s record-setting rally after this week’s dramatic price swings.
Rising U.S. bond yields helped spark a sharp selloff in gold Tuesday and early Wednesday, followed by a rebound later in the day. Both gold and silver have resumed their uptrend after the correction and remain among the best-performing commodities this year, aided by negative real yields and vast stimulus to combat the fallout from the coronavirus pandemic.
“Gold’s roller-coaster ride is far from over as bond yields will likely remain volatile for the rest of the summer,” said Edward Moya, senior market analyst at Oanda Corp. “The relentless pace higher for gold will moderate but the outlook still warrants a strong stretch of fresh, record highs.”
Spot gold traded 0.7% higher at $1,929.60 an ounce at 9:34 a.m. in London. On Tuesday, prices dropped 5.7%, the biggest one-day loss in seven years, following a rally to an all-time high last week. Futures for December delivery declined 0.5% on the Comex in New York.
Silver for immediate delivery rose 1.2% to $25.8065 an ounce after a 2.9% gain on Wednesday and 15% slump on Tuesday. The Bloomberg Dollar Spot Index dropped for a second day, while European stocks slipped as a global rally of equities showed signs of fatigue.
Read More: Gold Consumers in India Hug Sidelines Ignoring Steep Price Drop
Investors were also weighing a heightening of trade tensions between the U.S. and European Union, centered on a long-running dispute over illegal subsidies to Airbus SE. The Trump administration reordered its tariffs to better target French and German products, with the total subject to the levies remaining at $7.5 billion.
The death toll from the virus continued to climb, with India’s total surpassing the U.K.’s, according to the latest data collated by Johns Hopkins University. There were signs of resilience to the economic harm wrought by the pandemic though. Australia added four times as many jobs as forecast in July, withstanding a fresh lockdown in Victoria and concerns about infection spreading.
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