GLDM - Gold climbs past $2000 as OPEC cuts spark uncertainty safe-haven appeal

2023-04-03 18:35:21 ET

Gold prices settled above $2,000/oz for the first time in three weeks Monday, as a weaker U.S. dollar and a drop in U.S. Treasury yields after OPEC's surprise decision to cut oil production rekindled inflation fears and uncertainty about the Federal Reserve's response.

U.S. gold futures closed +0.7% at $2,000.40/oz, reversing initial losses and rising to settle at a three-week high as traders realized that "in the end nothing good can happen if oil prices continue to rise," Oanda's Edward Moya said, adding the OPEC+ decision is " really driving the inflation hedge trade " for gold.

Also boosting gold's safe-haven appeal, U.S. manufacturing activity fell to its lowest level in nearly three years in March as credit conditions tightened, extending losses for 10-year Treasury yields.

ETFs: ( NYSEARCA: GLD ), ( GDX ), ( GDXJ ), ( IAU ), ( NUGT ), ( PHYS ), ( GLDM ), ( AAAU )

Citing bullish momentum, a daily close over $2,000/oz Monday and Tuesday could cause a short covering rally and a move to $2,120, Insignia Consultants research director Chintan Karnani told MarketWatch , adding only a very strong March jobs report would cause a selloff in gold.

Investors pumped $1.26B into gold mutual and exchange-traded funds during the week ended March 22, the largest weekly net inflow since April 2022 .

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