Gold holding steady this morning after climbing to a three-week high in Tuesday’s session as investors flocked to the yellow metal as a hedge against uncertainty after the U.S. House of Representatives launched an impeachment inquiry into President Donald Trump.
Palladium climbed to a new record.
The December gold contract rose 0.6% Tuesday to settle at $1,540.20 an ounce on Comex, the highest closing level since Sept. 4. Bullion gained 1.7% in the first two days of the week. Silver slipped 0.4% Tuesday but has outpaced gold this week, with the most-active December up 4.4% in the first two days.
Spot palladium, which hit a new record high of $1,676.53 an ounce early Wednesday, climbed 1.2% Tuesday and 1.9% in the first two days of the week amid continued worries about supplies from South Africa and increased demand from China. Spot platinum slipped 0.5% Tuesday and rose 0.9% in the first two days of the week.
Investors are still closely watching the trade dispute between the U.S. and China, tensions in the Middle East, the status of Brexit, the state of the global economy and the possibility of further monetary easing.
In a speech Tuesday at the United Nations, Trump ratcheted up the rhetoric against China, reiterating that he wouldn’t accept a “bad deal” for the American people. The president also threatened to tighten sanctions against Iran and once again blamed the Islamic republic for drone strikes against Saudi Arabian oil facilities earlier this month. Asian stocks declined Wednesday.
Also Tuesday, the U.K.’s Supreme Court ruled that Prime Minister Boris Johnson’s decision to suspend Parliament for five weeks leading up to the Brexit deadline was unlawful. Johnson has faced calls to resign as MPs and peers return to London.
In economic news, U.S. consumer confidence fell the most in nine months in September, data from the Conference Board showed Tuesday. New home sales data comes out Wednesday, U.S. GDP data and initial jobless claims are due out Thursday and core PCE — the Fed’s preferred inflation measure — is scheduled for Friday.
Cleveland Fed President Esther George, one of the three members who opposed the cut last week, will speak Wednesday morning. Chicago Fed President Charles Evans and Dallas Fed President Robert Kaplan also speak have remarks scheduled for Wednesday.
The CME FedWatch Tool shows that investors now think that the Fed will cut interest rates for a third consecutive time when policy makers meet Oct. 30. The probability of a 25 basis point reduction was 62% early Wednesday, with 38% predicting no change.
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