Gold eases this morning as risk aversion lessens and the U.S. dollar boosts. Weak Treasury yields and continued uncertainty about the Omicron variant put a floor under prices, though prospects of a faster-than-previously expected taper of Federal Reserve stimulus measures pressured the yellow metal.
U.S. 10-year Treasury yields were near the more than two-month low they hit on Friday. Declines in Treasury yields make gold more attractive as an alternate investment.
Investors were awaiting the data on the U.S. consumer price index, set for release Friday, for the latest indicator on inflation. The Fed is widely expected to announce a faster taper of stimulus measures to combat surging inflation after the central bank’s policy meeting on Dec. 14 and 15. The statement after the Fed meeting will also be closely watched for indications on the timing of any interest rate increase, which would be bearish for gold.
Gold futures rallied 1.2% Friday after the U.S. Labor Department’s November jobs report showed U.S. employment growth slowed in November. Nonfarm payrolls increased by 210,000 last month, well below economists’ consensus estimate of 573,000. But the relatively negative economic report didn’t stem the speculation of a faster Fed taper.
February gold futures fell 0.2% last week to settle at $1,783.90 an ounce on Comex. Gold decreased 0.4% in November after advancing 1.5% in October. The yellow metal is down 5.9% so far in 2021. The February contract is currently down $4.00 (-0.22%) an ounce to $1,779.90 and the DG spot price is $1,780.30.
Fears about the spread of the new omicron variant of the coronavirus also helped fuel Friday’s rally in gold because of the yellow metal’s traditional role as a hedge against uncertainty. The new coronavirus variant has now been found in almost a third of U.S. states. Many countries around the world have imposed strict travel and lockdown measures to prevent the spread of the omicron variant, though it’s unclear how severe it may be.
March silver futures decreased 2.8% last week to settle at $22.48 an ounce on Comex, though the front-month contract gained 0.7% Friday. Silver fell 4.7% in November after rising 8.6% in October. The metal is down 15% so far this year. Silver prices are tied to industrial demand. The March contract is down currently by $0.190 (-1.16%) an ounce to $22.220 and the DG spot price is $22.29.
Spot palladium rose 3.3% last week to $1,833.00 an ounce after advancing 2.4% Friday. It plummeted 13% in November after rallying 4.3% in October. It’s down 25% so far in 2021. Currently, the DG spot price is off $4.70 an ounce to $935.00.
Spot platinum decreased 1.8% last week to $943.90 an ounce after falling 50 cents Friday. The metal dropped 8.1% last month after rising 6% in October. It’s down 12% so far this year. The DG spot price is currently down $20.80 an ounce to $1,812.00.
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