Gold trading just off three-week high reached last week, slipping a bit early Monday as investors took profits, but staying near the $1,800 mark.
The yellow metal rallied last week after the dollar weakened on the Federal Reserve’s new hawkish policy stance and amid worsening fears about the spread of the omicron coronavirus variant.
Investors are awaiting the U.S. index of leading economic indicators Monday for further direction as well as a slew of data including core inflation later in the week. Global financial markets are closed Friday for the Christmas holiday.
February gold futures rose 1.1% last week to settle at $1,804.90 an ounce on Comex and increased 0.4% Friday. Before the Fed announcement, gold had settled within a roughly $25 range for about three weeks, but Friday’s settlement was the highest for a front-month contract since Nov. 22. Gold decreased 0.4% in November after advancing 1.5% in October. The yellow metal is down 4.8% so far in 2021. The February contract is currently down $6.60 (-0.37%) an ounce to $1,798.30 and the DG spot price is $1,796.40.
Fed policymakers said Wednesday that they would speed up the timeline at which they would stop asset purchases begun to prop up the economy during the pandemic indicated that three interest rate increases would be likely in 2022 to combat soaring inflation. Rates are currently near zero.
The Fed statement weakened the dollar, which gave gold a boost because a weaker dollar makes gold more attractive to holders of other currencies. But higher interest rates could ultimately be bearish for gold because they make the precious metal less attractive as an alternate investment.
U.S. core inflation data for November is due out Thursday. The U.S. consumer price index, a closely watched barometer on inflation, surged to a 39-year high of 6.8% last month.
In other economic reports this week, consumer confidence and gross domestic product data come out Wednesday, with the latest weekly jobless claims report and data on durable goods and new home sales on Thursday
Markets also continued to grapple with what the omicron variant of the coronavirus will mean for the global economic recovery as parts of Europe shut down and Christmas and New Year’s celebrations were threatened around the world.
March silver futures increased 1.5% last week to settle at $22.53 an ounce on Comex after the front-month contract gained 0.2% 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. Currently, the March contract is down $0.253 (-1.12%) an ounce and the DG spot price is $22.27.
Spot palladium rallied 1.6% last week to $1,795.50 an ounce after rising 2.9% Friday. It plummeted 13% in November after rallying 4.3% in October. It’s down 27% so far in 2021. A global shortage of semiconductor chips means auto production is down and demand for the metal is waning. Palladium’s main use is in catalytic converters for gasoline-powered vehicles. The DG spot price for palladium is currently down $59.90 an ounce to $1,748.50.
Spot platinum advanced 0.2% last week to $949.00 an ounce, after gaining 0.5% Friday. The metal dropped 8.1% last month after rising 6% in October. It’s down 12% so far this year. Currently, the DG spot price is down $19.40 an ounce to $929.40.
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