Fresh One-Month High for Gold

December 28th, 2017 by

Spot gold hit another new one-month high this morning, trading up $3 to $1,290/oz. This erases all of gold’s losses from late November through December. If Thursday morning’s advance holds, it would be the seventh straight winning session for gold.

Spot silver rose by 5¢ (+0.33%) to $16.72/oz, back near its levels from the end of November. Platinum gained 0.4% to $924/oz and palladium slipped back to $1,050/oz.

The U.S. dollar fell by 0.4% on Thursday to 92.6 on the DXY index. All of the dollar’s major peer currencies posted solid gains as a result. Meanwhile, U.S. Treasurys continued to see some demand. The 10-year T-note yield moved lower to 2.43%.

Although the weaker dollar was helping support higher precious metal prices, the broader markets pushed higher on the back of the latest unemployment data in the U.S. The Department of Labor reported that weekly jobless claims were unchanged at 245,000 new applications for unemployment benefits were filed last week. Between the improving labor market and rising interest rates, one might expect the USD to be rising, not falling. However, because the interest-rate outlook over the longer term remains relatively low, the Fed’s gradual normalization of policy has not lifted the dollar nearly as much as anticipated. Inflation forecasts are also placing downward pressure on the dollar.

Wall St opened higher on Thursday amid more thin trading volumes ahead of the New Year’s holiday on Monday. Stocks were higher in Asia overnight and traded steady in Europe. The cryptocurrency bitcoin tumbled 7% to back below $15,000, failing to string together a new rally.

Authorities in South Korea added fuel to bitcoin’s continued slide by announcing that the country may consider halting trading on its bitcoin exchanges due to rampant speculation. This comes after China already shuttered any bitcoin trading and outlawed initial coin offerings (ICOs) weeks ago. India has also threatened to tax bitcoin. All of this has curbed some of the crypto mania. While it’s true that the decentralized nature of cryptocurrencies is what makes them appealing to many, it has also made mainstream adoption or approval of bitcoin by state governments much more complicated.

In terms of real commodities, the crude oil market held steady near 2-and-½-year highs. WTI crude traded right around $60 per barrel. Copper futures also hit a four-year high.

 

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.