The precious metals were largely unchanged but trending modestly higher when markets opened in New York on Tuesday. Spot gold opened slightly in positive territory, trading at $1,263/oz. Spot silver was also barely above flat at $16.14/oz. Palladium was likewise flat at $1,010/oz. Platinum posted the biggest gains, adding 0.66% to trade as high as $920/oz this morning.
With stocks likely to continue higher through the end of the year, we can expect less volume and activity in the gold market until there is some strong impetus for traders to change their positions in gold before the new year.
Considering virtually all of the economic news pointing in a positive direction in December, such an impetus for a safe-haven rush into gold seems unlikely. However, the dip in prices during the fourth quarter may encourage some bargain buying of gold and silver overseas in anticipation of the Chinese Lunar New Year.
The House of Representatives will vote on the final version of the long-awaited tax bill today. Many analysts don’t believe the legislation is perfect—which is usually the outcome when one party, in this case the Democrats, refuses to participate in the process. Nonetheless, the notion of cutting taxes appeals to wide swaths of the country. The Senate could vote on the bill as soon as this afternoon or tomorrow.
While the tax overhaul is projected to increase U.S. economic expansion at least modestly over the next decade, it’s worth noting that tax policy is not the only factor in growth. The bill can’t necessarily account for where interest rates or oil prices will be down the road, nor can it predict how many companies will use their tax savings to create jobs (as opposed to simply buying back their own shares).
Oil futures resumed their climb higher on Tuesday. WTI crude was up about 0.75% to $57.60/bbl. Meanwhile 10-year Treasurys tumbled to about a two-month low on Tuesday morning, sending yields more than three basis points higher to 2.42%. Bonds across Europe also fell. The dollar slipped to 93.55 on the DXY index although the Japanese yen and British pound were both slightly weaker. The euro added 0.4% to $1.183, a two-week high.
Shares on Wall St were mostly lower in early trading with the Nasdaq losing the most ground, down more than 0.4%. The S&P 500 and Dow Jones were both trading about 0.05% in the red. Asian stocks were mixed overnight, as were indices around the eurozone.
U.S. markets were beginning to turn higher after the Department of Commerce reported that housing starts rose 3.3% in November. Starts for single-family homes surged 5.3% to the highest in more than 10 years. Housing starts measure how many new residential building projects are breaking ground, suggesting future construction is forthcoming. This followed a gauge of homebuilder sentiment hitting its highest in nearly two decades earlier in the week.
Sadly, in other national news, tragedy struck commuters near Seattle, Washington yesterday when an Amtrak train derailed, resulting in multiple fatalities and leaving more than 70 others injured. Reports indicate that the train was traveling far above the speed limit at the time of the accident.
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