Gold prices turned positive on Thursday as investors swept in to buy the precious metal after it had declined as much as 1% earlier in the session. Gold for April delivery (GCJ21) had dropped amid a surge in U.S. bond yields and a stronger U.S. dollar. But, by midday, the price of gold had recovered, trading slightly higher at $1728.70 an ounce.
Many investors view gold as a hedge against higher inflation. Treasuries also offer some protection, however, and so as bond yield creep higher, some investors are flocking to the safety of government bonds. That said, investors seemed to be diversifying their bets, pouring money into both gold and treasuries on Thursday.
Meanwhile, the U.S. dollar continues to show signs of strength despite the promise of continued low rates and bond-buying from the Federal Reserve on Wednesday. The U.S. Dollar Index (DXY) traded up 0.33%, at 91.75 at midday Thursday. Strength in the dollar typically weighs on dollar-denominated gold prices.
Palladium Prices Soar
Palladium continues to power higher amid strong demand prospects as continued supply concerns. The Russian mining company Nornickel recently said it was working to address supply concerns due to water logging at some of its Siberian palladium mines. This is helping to drive palladium prices higher. Palladium for April delivery (PLJ21) jumped 2.61% to $1,230.6. The June contract for Palladium (PAM21) soared to a higher of $2,746.00 a gain of 8.24%.
Silver (SIK21) for May delivery moved slightly higher in trading. The metal moved up 0.81% to $26.28.