The financial markets seemed to be taking a deep breath on Friday.
Gold prices held just below unchanged at $1,351/oz (-0.2%) as the Chinese Lunar New Year celebration begins.
Exchanges in Shanghai will remain closed for the holiday through next Thursday.
The U.S. stock market also saw sleepy opening action. Wall St and gold are both capping off a very strong week.
Spot gold rose over 3% for the week, its best performance in about two years.
Spot silver was off around 13¢ (-0.75%) to $16.70/oz.
Palladium rallied $15 (+1.5%) to back above $1,020 for the first time since the big stock market selloff kicked off about two weeks ago.
Meanwhile, platinum added $3 (+0.3%) to $1,003/oz.
The precious metals are holding onto their increase this week on an otherwise “Flat Friday.” It’s a respite from an extremely volatile half of the month.
Gold touched above $1,360 per ounce overnight before a rebounding dollar erased the gains.
Dollar Down for Week, Building of New Homes Up
Homebuilding in the U.S. has shown a strong beginning to 2018. The Department of Commerce reported that housing starts were up 9.7% in January.
It seems like every piece of the economic data released so far in February has been encouraging to analysts.
The same report showed new building permits also rose 7.4% from the previous month. New permits are now at their highest in more than 10 years.
Thanks to the robust data, the dollar finally traded in the green after its worst week of losses in two years. The DXY index rose 0.4% to 88.9.
This was met by the pound and euro each losing about 0.6% to the USD.
The Japanese yen was virtually unchanged at a 15-month high at ¥106. 2. Both of the country’s main stock indices, the Nikkei and the Topix, gained better than 1% by the close.
Shares in Europe and London traded solidly in the green again. France’s CAC 40 led the way 0.95% higher. The index has been the best European performer in 2018, up 7.6% year-to-date.
Chinese markets were closed yesterday for the Lunar New Year. Retail demand for gold leading up to the holiday has been one of the factors in lifting prices of late.
Equities have been digesting various signs that inflation expectations are rising. While the drumbeat about inflation has been steady in the media, it’s based more on projections and forecasts than actual inflation observed on the ground.
U.S. bonds rallied as the 10-year yield fell by five basis points to about 2.86%.
The crude oil benchmarks were mixed. WTI fell 24¢ (-0.4%) to $61.10/bbl while Brent gave back earlier gains to trade flat at $64.33/bbl.
Bitcoin continued to trade just north of $10,000 per BTC.
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