The precious metals continued their modest rally dating back to last week when markets opened on Monday morning. The gold price added 0.2% to trade close to $1,260 per ounce, its highest in five weeks. Spot silver traded 5¢ higher as well (+0.3%), pushing the argent metal up to $16.55/oz.
Platinum and palladium each gained about 0.25%.
Here’s a look at Friday’s closing numbers for the metals:
Gold: $1,254.40/oz (+$10.40, +0.84%)
Silver: $16.50/oz (+19¢, +1.20%)
Platinum: $934/oz (+$8, +0.86%)
Palladium: $841/oz (-$2, -0.24%)
Dollar Remains Shaky
Not surprisingly, the surge in the metals has coincided with a prolonged slump for the U.S. dollar. The Japanese yen has been one of the main beneficiaries, as short positions against the USD by speculators are now at their highest levels since 2013. As measured by the DXY index, the dollar was up about 0.1% this morning yet remained below 94.0.
This is mainly because the euro was slightly off against the dollar on Monday after a pair of news items dampened the growth outlook for the European economy. Nonetheless, the euro is still trading above $1.16, its highest in over 2 years.
The two data points that are causing investors some concern are the reduced growth forecast for both the U.K. and the U.S. from the International Monetary Fund (IMF) due to the expectation that stimulus measures will soon be unwound in both countries. Aside from China, these are by far the next two largest trading partners for Europe. Moreover, the composite PMI reading for the eurozone was its worst in six months, adding more fuel to the narrative that the continent is beginning to see its economy cool off. The strength of the euro didn’t help stocks in the region, either: European indices were mixed, while London’s FTSE 100 lost about 1%. All three U.S. indices opened lower. The Nasdaq finally snapped its 10-session winning streak on Friday.
The other major economic news to kick off this week is the OPEC meeting being held in St. Petersburg, Russia today. The main outcome expected from the gathering is a decision to curb production by Nigeria and Libya, who were originally exempted from the reduction quotas. Both WTI crude and Brent crude were 1% higher during early trading, pushing prices to $46.25/bbl and $48.50/bbl, respectively.
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.