After slipping below $1,130 per ounce in the early morning hours on Thursday, the gold price recovered back into positive territory by 10 am EST in New York trading. Most precious metal traders are focusing on a slightly softer U.S. dollar and modestly higher crude oil prices in the near-term. At any rate, trading volumes can be expected to remain low as the Christmas holiday approaches and the calendar says goodbye to 2016.
Spot gold stood at $1,134/oz, about 0.1% higher from its previous close. Spot silver poked into the green but was largely unchanged at $16/oz. Both of the Platinum Group Metals were also marginally above unchanged.
Year-End Economic Data
In a general sense, the typical “Santa Claus rally” that accompanies the final weeks of the year has been replaced in 2016 by the “Trump rally.” Perhaps this year the two trends are intertwined. The running debate about how the Federal Reserve will proceed with raising interest rates further is also an overriding narrative in virtually all of the markets. The prospect of higher rates has pushed U.S. mortgage rates to a new two-year high.
With quiet action on trading floors a likelihood through the rest of the year, the trickle of statistics about the U.S. economy are driving the year-end performance of the financial markets.
The big story on Thursday was the final revision of third-quarter GDP, which was clocked at a robust 3.5%. Yet another upward revision to this measure didn’t help U.S. stock indices, however, which were charting their second straight losing session. The Dow Jones has shown that the 20,000 milestone is proving to be a hard ceiling of resistance.
U.S. jobless claims did rise to their highest level in six months. While official unemployment levels are now well below 5% nationally, the historically low rate of labor participation in the U.S. reveals that the labor market still has a ways to go. Moreover, weaker income growth during November caused consumer spending to slow despite another record-breaking season of holiday shopping.
Other key November data being released were mixed. While orders for business equipment in the U.S. beat forecasts, indicating that corporations are beginning to boost investment and business sentiment is improving. However, durable goods orders fell by 4.6% during the month, mostly dragged down by a significant drop in aircraft orders.
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