Precious metal-related exchange traded funds jumped Monday, with gold prices breaking above $1,800 per ounce, as the U.S. dollar weakened and investors speculated on the Federal Reserve delaying plans to taper its accommodative monetary policies.
Among the better performing non-leveraged ETFs of Monday, the Global X Silvers Miners ETF (NYSEArca: SIL) rose 4.8%, the U.S. Global GO GOLD and Precious Metal Miners ETF (GOAU) advanced 4.2%, and the Sprott Gold Miners ETF (SGDM) increased 4.5%.
Meanwhile, the iShares Silver Trust (SLV) was up 2.5%, the Sprott Physical Silver Trust (PSLV) added 1.8%, the SPDR Gold Shares (NYSEArca: GLD) was 1.3% higher, and the Sprott Physical Gold Trust (PHYS) gained 0.9%. Comex gold futures pushed 1.3% higher to $1,807.1 per ounce and Comex silver futures increased 2.3% to $23.68 per ounce.
“Stocks are up, dollar is down and it’s all being driven right now by the likelihood that the Federal Reserve might push back tapering further due to the Delta variant” of the coronavirus, Bob Haberkorn, senior market strategist at RJO Futures, told Reuters.
A surge in COVID-19 cases pushed the Fed to schedule its August 27 annual symposium in Jackson Hole, Wyoming virtually, which further added to speculation about the economic hurdles with rising infection rates. Investors are now waiting on Chairman Jerome Powell’s speech for any indications on the direction of tapering.
Haberkorn argued that the Fed might not be in a position to ease its policy “anytime soon, which is bullish for gold and silver.”
Adding to the strength in the precious metals segment, the U.S. dollar depreciated, which makes USD-denominated bullion cheaper for foreign buyers.
However, if economic data expected this week “paints a positive image of the U.S. economy, this could fuel Fed taper expectations – ultimately boosting the dollar while weakening gold,” FXTM analyst Lukman Otunuga told Reuters.
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