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Trump Headlines Davos, Gold Price Holds at $1,350

January 26th, 2018 by

The gold price fell sharply on Thursday afternoon following comments by President Trump about supporting a strong dollar.

Profit-taking also had an impact on the precious metals as COMEX gold futures tumbled 1% and silver futures lost 1.5%.

Spot gold still opened about 0.4% higher on Friday, just shy of $1,353/oz.

The silver price, meanwhile, traded at $17.37/oz, up about 11¢ (+0.67%).

Platinum rose 0.4% (+$4) to $1,017/oz. Palladium continued its slump, losing $5 (-0.45%) to around $1,082/oz.

Markets Digest Mixed Economic Data in U.S.

A pair of key economic data points caused a bit of volatile action in U.S. markets on Friday.

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Fourth-quarter gross domestic product (GDP) came in at 2.6%, well short of expectations of 3.0% growth. For comparison, the economy expanded by 3.2% during the third quarter.

This was still higher than the annualized growth of 2.3% last year, which followed just a 1.5% expansion in 2016.

The GDP figures from the Department of Commerce attributed the weaker growth to higher imports into the U.S.

Imports rose by almost 14% last quarter, the sharpest increase in more than seven years.

However, consumer spending was still strong, up 3.8%. This closely correlated with the jump in imports.

In a separate report, orders for durable goods—big investments in new equipment, essentially—rose by 2.9% in December. This was the biggest increase in six months.

President Trump Takes Center Stage As Davos Wraps Up

The U.S. dollar rebounded late during Thursday’s trading session after President Trump countered recent comments by his cabinet members about a weak dollar.

The president’s strong-dollar rhetoric was seen as a return to normalcy by Washington’s standards. The greenback was still down 0.35% to below 89.1 on the DXY index on Friday morning.

Knee-jerk movement by the dollar this week is somewhat unusual. Comments made at the World Economic Forum in Davos, Switzerland typically fly under the radar.

Stock futures on Wall St erased earlier gains. The 10-year Treasury yield fell two basis points to 2.63%.

Stocks in the U.S. are still regularly notching new all-time highs, but this trend could be dampened later this year if the Federal Reserve keeps raising interest rates.

The euro fell back to $1.24 in response to Trump’s statements about the dollar. Equities in Europe were in the green across the continent, led by France’s CAC 40 (+1.05%).

The Japanese yen was flat at ¥109.4 per dollar. Shares in Japan were off slightly but traded higher in the rest of the Asia-Pacific region. Hong Kong’s main stock index rose 1.5% overnight.

In the commodities markets, oil prices were off from their recent highs. WTI crude for March delivery traded at $65.60/bbl.

During his highly-anticipated speech amid the financial elite gathered in Davos, President Trump implored the audience not to ignore the forgotten 99% who have largely been harmed by the effects of globalization.

This is a powerful populist message that one hopes did not fall on deaf ears.

Trump reiterated the administration’s stance on fairer trade. He stressed that “America First does not mean America alone.”

The president also highlighted his role as a master negotiator, explaining that the U.S. is open to participating in international trade agreements such as the Trans-Pacific Partnership (TPP) so long as the terms are favorable.

 

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