Gold prices are trading near ten-month lows, as the “Santa Trump” rally continues to pull money into stocks. Bond prices are taking a breather this morning from the rout they have suffered since Trump’s electoral victory, with yields trending marginally below Monday’s close.
Gold futures on the COMEX settled only marginally lower on Monday, with the February contract losing $1.30 to end at $1176.50. Spot gold hit late weakness to close $7.10 lower, at $1,170 per ounce. Silver futures gained 6.7 cents to settle at $16.90 an ounce, while spot silver closed down one cent at $16.71 after hitting a high of $16.93.
On the currency front, the US dollar has recovered the 100 mark on the DXY basket of major currencies this morning, while the euro and British pound retain yesterday’s gains. The euro is being supported by a huge jump in German factory orders, which grew by 4.9% in October. Economists were expecting only a marginal 0.6% gain.
Stocks on Wall St opened higher Tuesday and promptly fell just under unchanged in volatile trading. All three major indices are jumping between slight gains and losses.
Monday saw the Dow record another all-time high, gaining 0.2% to close at $19,216,24. The S&P 500 closed 0.6% higher, and the Nasdaq notched a 1% gain, but neither regained enough ground to set new records. Goldman Sachs saw its share price leap 2.2% to a nine-year high.
Oil prices are lower after hitting 16-month highs, as traders see OPEC and Russia moving the goal posts on the recently-signed production limit deal. Production for both the cartel and Russia climbed in November, ahead of the production limit agreement going into effect in January. This means that, even with the cuts, more oil than first expected will be hitting the market. This is also going to make convincing non-OPEC oil producers to cut production a hard sell.
European traders are pinning their hopes on higher oil prices increasing inflation in the Eurozone, which will allow the European Central Bank to ease back on its ultra-loose monetary policy. If this Thursday’s meeting ends with the bank extending its QE program, traders will turn sour, and the euro’s recent gains will evaporate.
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