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Precious Metals Hit 4-Week Highs After Christmas

December 26th, 2017 by

american gold eagles

Traders and investors returned to action on Tuesday as markets in the U.S. reopened after observance of Christmas. Gold and silver futures pointed higher to their best in four weeks.

Spot gold added $6 (+0.45%) to $1,280/oz, putting its year-to-date gains at a robust 13%. This is despite still losing 0.6% over the last month and surely ending the year short of its 2017 highs around $1,350/oz.

Early trading also saw spot silver advance 9¢ (+0.6%) to nearly $16.50/oz. Platinum was flat below $920/oz and palladium rallied 0.9% to almost $1,040/oz. If things hold through the end of the year (Monday is January 1st), platinum will end 2017 virtually flat. By contrast, palladium has easily been the #1 performing commodity futures contract, up an astounding 50% this year.

Bulls will be hoping that gold extends its five-session winning streak today. Trading volumes were thin as exchanges were still closed in Europe and the U.K. as well as Hong Kong and Australia. Stocks were slightly lower on Wall St after the long holiday weekend, led lower by the Nasdaq (-0.45%) and shares of Apple, which lost 2.9%. Equities in Japan fell but were modestly higher elsewhere in Asia.

The dollar was up 0.1% to 93.35 on the DXY index but still hung around its quarterly lows. The forex market was very quiet in post-Christmas trading. Bonds were steady as well. The 10-year Treasury yield nudged higher to about 2.48%. In the energy sector, crude oil gained 0.5% and natural gas jumped 1.5% in response to seasonal demand in the northern hemisphere.

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After falling below $11,000 heading into the weekend, bitcoin rebounded to about $15,000 per BTC on Tuesday. The cryptocurrency has had a brutal week of action, but it has tended to recover quickly from earlier downturns. This “rollercoaster movement” is in direct contrast to the pattern stocks have followed this year: the VIX index measuring market volatility is down more than 30% this year, suggesting volatility has been extremely low.

Everyone is looking ahead to predictions and strategies for 2018, which as usual is drawing a wide variety of opinions ranging from how a new bull market will be unleashed to why the markets will utterly crash. Interestingly, Goldman Sachs forecasts that volatility could return to stocks to start the new year now that the VIX is at historic lows.

Later this morning, the Case-Shiller home price index for October will be reported. Other economic data to watch will be manufacturing surveys from both the Richmond Fed and Dallas Fed this afternoon.

 

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.