Gold hits two-month high early Monday in anticipation that interest rates will remain low over the short term, making the precious metal more attractive as an alternative investment.
Statements from the Federal Reserve, the Bank of England and the European Central Bank last week indicated that inflationary concerns, which might have been expected to trigger interest rate increases, are taking a back seat for the next few months at least.
Investors are awaiting the release of U.S. consumer price index data Wednesday for further signals on inflation.
December gold futures rose 1.8% last week to settle at $1,816.80 an ounce on Comex after the front-month contract increased 1.3% Friday. Gold advanced 1.5% in October after retreating 3.4% in September. The yellow metal is down 4.1% so far in 2021. The December contract is up $5.60 (+0.31%) an ounce to $1,822.40 and the DG spot price is $1,826.50.
Gold last week after the Fed signaled it still sees rising inflation as “transitory” and doesn’t plan a rapid rate increase. The BOE also held interest rates at record lows, and ECB policymakers said inflation would likely decline next year.
On Friday, the U.S. October jobs report showed an increase in nonfarm payrolls of 531,000, beating expectations of 450,000, and a new pandemic low unemployment rate of 4.6%. Both figures showed the economy is rapidly recovering from hits experienced during the worst of the pandemic.
In upcoming economic news, San Francisco Fed President Mary Daly is scheduled to speak Tuesday. In addition to CPI Wednesday, U.S. wholesale inventories and weekly initial jobless claims data are due. The federal government and bond market will be closed Thursday to commemorate Veterans Day. The Chinese producer price index is also due out Wednesday.
December silver futures increased 0.9% last week to settle at $24.16 an ounce on Comex after the front-month contract rallied 1% Friday. Silver increased 8.6% last month after dropping 8.2% in September, its fourth consecutive monthly decline. The metal is down 8.5% so far this year. Silver prices are tied to industrial demand. The December contract is up $0.258 (+1.07%) an ounce to $24.415 and the DG spot price is $24.49.
Spot palladium rose 1.7% last week to $2,039.50 an ounce after gaining 1.1% Friday. It rallied 4.3% in October after declining 23% in September. It’s down 17% so far in 2021. The DG spot price is currently up $10.90 an ounce to $2,053.50.
Spot platinum increased 1.2% last week to $1,041.00 an ounce after increasing 0.6% Friday. The metal rose 6% in October after losing 5.3% in September. It’s down 3% so far this year. This morning, platinum continues its uptick. Currently, the DG spot price is up $22.10 an ounce to $1,063.90.
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