Spot Gold Rebounds Before Thanksgiving

November 22nd, 2017 by

Amid a flurry of economic data on Wednesday morning, the precious metals opened modestly higher in early trading. Spot gold rose $8 (+0.66%) to $1,288/oz and continued to trade in a fairly tight range. Spot silver virtually repeated its pattern from the previous two sessions, recovering 17¢ (+1.0%) at the open to trade back around $17.10/oz. Meanwhile, platinum and palladium sat around $940/oz and $990/oz, respectively.

Some of the action in the gold market was the result of a weaker dollar. The USD slipped 0.33% to 93.65 on the DXY index. This mainly benefited the Japanese yen, which traded up 0.5% to ¥111.7 per dollar.

Due to the Thanksgiving holiday tomorrow, the release of jobless claims and durable goods orders were pushed up to this morning. Wednesday’s session will likely be calm and characterized by low volume with many traders heading on vacation early.

Wall St opened virtually flat on the various news. Stocks were up overnight in Asia and traded higher in Europe when markets opened this morning.

The Department of Labor reported that 239,000 Americans filed for unemployment benefits for the first time last week. Jobless claims fell by 13,000, a wider margin than analysts had anticipated. The unemployment rate remains at 4.1% nationally as of October’s reading, and some individual states have unemployment below 3%.

Durable goods were unexpectedly a huge miss during October, however. The Department of Commerce tracks the orders as an approximate gauge of business spending on equipment and capital goods, a key sign of economic health. A modest increase was expected, but durable goods orders fell 1.2% last month.

The Baker Hughes rig count for last week was also reported this morning ahead of the Thanksgiving recess. The rig count rose by 13 in North America (+8 in the U.S. and +5 in Canada), indicating that producers are increasing their supply of crude to meet rising demand. They are filling in for decreased production from OPEC states, but the cartel’s agreed-upon supply cuts seem to be having their desired effect: oil prices are currently trading at a two-year high, with WTI crude advancing over 1.5% this morning to $57.75/bbl. Brent crude was above $63/bbl.

There is some concern in Silicon Valley (and across the country) about the Federal Communications Commission (FCC) recently announcing plans to loosen regulations intended to ensure “net neutrality.” The debate over net neutrality appears to be at a tipping point: the FCC’s proposal to remove these Obama-era restrictions would allow telecom companies and internet service providers (ISPs) to soon begin charging websites more for faster content and connection speeds. This essentially restricts what an internet subscriber may be able to access in the future. Any action by the FCC is sure to be challenged in the courts—as well as tried in the court of public opinion.

Whatever the outcome, consumers will have to be notified before any changes to the prices or features of their own service packages are made. Still, the ruling could fundamentally alter the business model for how people receive their internet, cable, and streaming services.

Exchanges in the U.S. will be closed tomorrow. Friday will be a short session, with markets in New York closing at 1 pm. Of course, the Black Friday “shopping holiday” will begin as soon as ovens across America begin to cool early Thursday evening.

 

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.