Gold heads for weekly gain, after a brief market correction drop in early trading. This would be the second consecutive weekly gain for the yellow metal that is lingering near a two-month high as U.S. Treasury yields slid from near two-year highs.
Platinum and palladium headed for substantial weekly gains on anticipation that auto sales growth would approach normal levels this year. Palladium’s main use is in catalytic converters for gasoline-powered vehicles.
April gold futures slipped 60 cents Thursday to settle at $1,844.90 an ounce on Comex. The front-month contract rose 1.6% so far this week as the most-active month rolled from February. Gold advanced 2.9% in December — its best month since May — and climbed 4.1% in the fourth quarter. But it dropped 3.5% in 2021. The April contract is currently down a tad, $0.20 (-0.01%) an ounce, to $1,844.70 and the DG spot price is $1,843.60.
Investors are awaiting next week’s meeting of Federal Reserve policymakers for indications on what the central bank will do in the coming year to combat soaring inflation. While few traders anticipate a rate hike in January, the CME FedWatch Tool showed that 93.4% of traders anticipate one at the March meeting of the Federal Open Market Committee, up from 89.5% a week ago.
Rate increases are typically bearish for the yellow metal because they make it a less attractive investment than other assets. But gold prices remain supported by inflation — for which gold is a traditional hedge — and uncertainty caused by the omicron variant of the coronavirus.
Gold’s future direction will likely be driven by the Fed’s language and moves.
Speculation is growing that the FOMC will announce an increase of more than a quarter-percentage point when it does raise rates to rein in inflation, which rose at the highest level in 39 years in December.
The omicron variant of the coronavirus adds a threat to the global economic recovery which could also boost gold prices. U.S. initial jobless claims rose by 286,000 last week to the highest level since October, in an apparent sign that the surge in omicron cases was hitting the labor market.
Spot palladium increased 3.3% Thursday to $2,089.00 an ounce. It’s up 11% so far this week. Palladium rallied 9.6% in December, but it fell 0.4% in the fourth quarter and 22% in 2021. The metal continues its march higher this morning with the DG spot price up $43.80 to $2,134.50.
Spot platinum gained 2.2% Thursday to $1,060.40 an ounce and is up 8.7% so far this week. The metal gained 2.9% in December and 0.2% in the fourth quarter. It lost 9.4% last year. The DG spot price is currently flat at $1,057.70 an ounce.
March silver futures rallied 2% Thursday to $24.72 an ounce on Comex. The front-month contract advanced 7.9% so far this week. Silver gained 2.4% in December and 5.9% in the fourth quarter, though it dropped 12% in 2021. Silver prices are tied to industrial demand. The March contract is slightly down this morning, off $0.136 (-0.55%) an ounce to $24.580 and the DG spot price is $24.61.
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