The gold price was unchanged again on Tuesday morning, trading at $1,333/oz.
Markets were focused this morning on the policy announcement by the Bank of Japan and the continued flow of corporate earnings.
It’s an encouraging sign that, even in the absence of strong safe-haven demand, gold has held steady in the face of the stock market’s long bull run.
However, spot silver tumbled 1% (-17¢) to fall near $16.80/oz.
Platinum traded $5 higher (+0.5%) at $1,000/oz after losing some ground on Monday afternoon.
Meanwhile, palladium slumped another 0.9% (-$10) to $1,080/oz.
Government Shutdown Ends (For Now)
Stocks turned positive by the end of yesterday’s trading session as Congress reached an agreement on ending the government shutdown.
Public services reopened and normal bureaucratic operations resumed today in Washington after lawmakers struck yet another short-term spending deal. This temporary fix will keep the federal government funded for three more weeks.
The bill didn’t resolve any of the issues at the heart of the gridlock, though. Democrats in the Senate capitulated on the shutdown, choosing to kick the can down the road on the immigration debate.
The end of the shutdown caused the bond market to rebound slightly. 10-year Treasurys were up as yields fell three basis points to 2.62%.
Stock futures pointed toward new record highs on Wall St on Tuesday as well.
Bank of Japan Decision Lifts Markets
Following its meeting on Tuesday, the Bank of Japan indicated it would not be scaling back its monetary stimulus program. Many had expected the BOJ to be more hawkish as central banks in the West are beginning to tighten monetary policy.
According to the BOJ Governor Haruhiko Kuroda, it’s too soon to normalize policy. The announcement caused the yen to advance 0.4% to ¥110.5 against the dollar.
Both of Japan’s major stock indices, the Nikkei 225 and the Topix, were up better than 1% overnight. Equities across Asia also rallied.
The dollar traded lower again, registering at 90.3 on the DXY index. Through the first three weeks of 2018, the dollar index is down 2%.
Shares in Europe were mixed as the euro was flat. The pound sterling was slightly off its recent highs but threatened to reclaim the $1.40 level, its strongest in more than a year and a half.
It’s unsurprising that the last time the pound was above $1.40 was before the Brexit referendum in Summer 2016.
Earnings, Tariffs, and Elites In the Snow
Fourth-quarter earnings continue to be reported. Netflix was one of the big names posting strong earnings, pushing the firm’s market capitalization above $100 billion for the first time. Over the past six months, its stock price has rallied over 50%. The company’s shares rose 9% on Tuesday morning to a new record-high.
In commodities, crude oil prices gained 0.7%. WTI crude moved back to $64/bbl while Brent crude traded at $69.50/bbl. Natural gas futures jumped better than 4%.
Bitcoin continued its volatile price swings. The altcoin fell more than 2% to about $10,500 on Tuesday.
The White House made news suggestive of a possible trade war after President Trump levied a new 30% tariff on imports of solar panels. Much of the solar equipment the U.S. imports come from China and South Korea.
These tariffs will be effective for four years but will gradually be halved to 15% by the end of that period. Despite some objections, Trump’s 30% figure is actually less than the 35% recommended a few months ago by the U.S. International Trade Commission.
Elsewhere, investors will be keeping on eye on the World Economic Forum being held in Davos amid heavy snow.
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