gold bars and gold coins

Precious Metals Fall In Early Trading

November 20th, 2017 by

The precious metals are trying to hold onto last week’s gains amid slightly risk-averse market conditions. Monday morning saw spot gold fall about $6 (-0.5%) to $1,287/oz while spot silver tumbled much farther, losing 1.36% to $17.04/oz. Palladium was unchanged just shy of $990/oz and platinum prices slumped 1.37% to $935/oz.

Expect to see lighter trading volumes this week with the approaching Thanksgiving holiday on Thursday.

gold bars and gold coins

Here’s a glance at Friday’s closing numbers:

Gold: $1,293.40/oz (+$15.10, +1.18%)
Silver: $17.27/oz (+22ยข, +1.32%)
Platinum: $948/oz (+$17, +1.83%)
Palladium: $988/oz (+$5, +0.51%)

Dow Jones: 23,358.24 (-100.12, -0.43%)
S&P 500: 2,578.85 (-6.79, -0.26%)
Nasdaq: 6,782.79 (-10.50, -0.15%)
DXY: 93.67 (-0.20, -0.21%)
WTI crude: $56.68/bbl (+$1.41, +2.55%)

While Washington D.C. has been mired in scandals and partisan fighting of late, the attention has momentarily shifted to Europe’s biggest economy, Germany. The once-popular Chancellor Angela Merkel was unable to hold together her coalition government, throwing the country’s parliamentary system into a bit of disarray. The lack of a majority government may trigger new elections this spring, perhaps portending Merkel’s ouster as chancellor.

The political turmoil in Germany initially send the euro lower, but the common currency recovered virtually all of its losses later in the session. Germany’s DAX stock index also rebounded from a seven-week low. It appears that the improving fundamentals for the German economy is providing investors with a good reason not to overreact to the political situation.

Elsewhere in Europe, the U.K. is supposedly upping its offer in the Brexit negotiations. The two sides are attempting to break through what has been nearly an 18-month impasse. Westminster and Brussels are still no closer to an agreement or settlement than the day of the Brexit referendum last summer.

Nonetheless, both the British pound sterling and the euro were up about 0.33% against the USD when markets opened in New York. The DXY index was still modestly higher on Monday to 93.8. The 10-year Treasury yield rose one basis point to slightly above 2.36%.

Analysts on Wall St are positioning themselves for next month’s Fed meeting, where the central bank is widely expected to raise interests by another 25-basis-point increment. Goldman Sachs is forecasting four more rate hikes in 2018, which would bring the fed funds rate over 2% for the first time since before the financial crisis. This may be an overly optimistic prediction, however: similar forecasts were made in both 2016 and 2017, yet the Fed has opted for no more than two rate hikes in each of the last two years.

The most recent Fed minutes as well as details from last month’s meeting of the European Central Bank will come out later this week. Meanwhile, newly-minted Fed Chair Jerome Powell will reportedly use his leadership position to focus on cutting financial regulations. Thus far, this would represent Powell’s greatest departure from his predecessor Janet Yellen.

 

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.