Gold, Bonds Gain on Trump Anxiety

January 23rd, 2017 by

Gold prices briefly extended their winning streak to hit a two-month high of $1,219.43 an ounce in London overnight. At the New York open, however, the yellow metal was smacked lower, giving up about $5 per ounce. This has typically been the case when gains are made in Asia overnight.

Silver prices were about 7¢ per ounce higher (+0.4%), trading near $17.15/oz. Platinum and palladium saw less action, though the former was slightly above unchanged.

Post-Inauguration Safe Haven

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Spot gold ended the week and ushered in the Trump Era by closing up $5.50 an ounce to seal the fourth straight week of gains. Spot silver closed at $17.06, a gain of six cents on the day, as spot platinum gained more than 2% on Friday, snapping a four-session losing streak. Spot palladium continues to ride upbeat industrial and auto sales estimates, cashing in $36.00 higher for the day. That’s a huge 4.79% jump. Palladium has been among the best-performing assets in the world so far in 2017.

In fact, together, the Big Four (gold, silver, platinum, and palladium) precious metals are all in the top ten performing commodities of 2017 so far.

PRECIOUS METALS FUTURES FIRST 20 DAYS OF 2017

Palladium    +15.48%    +$105.75    #1

Platinum      +8.31%      +$75.30    #5

Silver            +7.01%       +$1.12     #6

Gold            +5.05%       +$58.20    #10

The precious metals continue to outperform on the futures market, as well. February COMEX gold bounced back after taking a huge hit Thursday from a booming dollar.

Outside Markets

Stocks in the U.S. opened sharply higher on Friday but ended the trading sessions only slightly in positive territory. A similar pattern appeared to be shaping up on Monday. U.S. indices are seeing strong resistance at their most recent all-time highs, as the Dow Jones has not impressed since coming within a hair of the 20,000 mark, falling short by a mere fraction of a point. Out of the three main indices, the Nasdaq has performed the best, buoyed by biotech stocks.

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The lack of a “presidential pivot” by President Trump has stoked market anxieties about trade policy and government transparency in the Age of Trump. Safe haven assets are once again seeing demand after a period of enthusiasm following election day. The 10-year Treasury yield fell back to 2.40% while the yield on the 30-year note is back below 3.0%.

In the oil market, Brent crude again slid, losing 0.67% as it approached $55 per barrel. Yet, West Texas Intermediate (WTI) went the opposite direction, closing the spread between the two benchmark by adding 2% to almost $52.50/bbl.

Forex traders were busy unraveling the comments by President Trump that seem to be intended to soften the dollar. The euro and pound sterling rallied against the greenback on Monday, rising above $1.07 and $1.24, respectively. The Japanese yen ceded some ground but was still relatively strong at 113¥ per USD. Against a larger basket of currencies, the dollar was about 0.4% lower, registering around 100.3 on the DXY index.

 

The opinions and forecasts herein are provided solely for informational purposes, and should not be used or construed as an offer, solicitation, or recommendation to buy or sell any product