Today we saw another USD 29 dollars taking gold prices...

Today we saw another USD 29 dollars taking gold prices substantially higher.

As of 5:34 PM EST (New York), Gold futures basis the most active December 2021. Comex contract is currently fixed at $1781.50, after factoring in today’s net gain of USD$29.70 or 1.5%.

Today’s continuation to the upside is a result of dollar weakness, as well as data released by the University of Michigan consumer sentiment index, which fell to 70.2 in August. This is the lowest level since the most difficult period of the pandemic in April 2020. In July, the consumer sentiment index was at 81.2.

According to Brian Lundin, editor of the gold newsletter and reported by MarketWatch, “Gold futures had become “oversold” following sharp losses last Friday and on Monday. The rebound in prices seen since then is “largely due to investor recognition that the crash was simply short-term market manipulation and no real reflection on the supply/demand dynamics for the metal.” He also told MarketWatch that, “the market has also seen “growing concerns over the delta variant and the economic repercussions from its spread, as evidenced by the dramatic fall in consumer sentiment” reported Friday. It’s all contributing to a general view that gold is undervalued at these levels.”

According to Jeff Klearman, portfolio manager at Granite shares, Most of the move higher more recently for gold this week is due to increasing inflation concerns in light of the Fed “maintaining its ultra-accommodative monetary policy in the belief current high inflation is transitory,”

speaking to MarketWatch, he said that, “Extremely low and negative real yields, reflecting expectations of continued accommodative monetary policy, support gold prices because they eliminate the opportunity cost of holding gold while increasing gold’s safe-haven desirability due to possible upside.”