Gold rallies this morning on higher than expected Core PCE inflation data, as investors turn to the yellow metal as a hedge, overcoming pressure from a stronger dollar.
December’s Personal Consumption Expenditures (PCE) Price Index inched higher to 1.3% from 1.1% in November, per the US Bureau of Economic Analysis. While the Core PCE Price Index, the Federal Reserves preferred measure of inflation, rose 1.5% –higher than the 1.3% forecast. The Comex April contracts rose over 1.9% on the day while the US Dollar Index showed no immediate reaction to this report and was last seen at 90.45.
The U.S. currency has strengthened in recent days on speculation that President Joe Biden’s stimulus package won’t be as large as the $1.9 trillion he has proposed. And the dollar has become the favored safe-haven asset. Global equities are heading for their worst weekly slide in about three months.
April gold futures fell 0.4% to $1,841.20 an ounce Thursday on Comex. Front-month futures are down 1% so far this week and 2.8% this month. Gold climbed $372 — or 24% — in 2020 because of uncertainty about the economy and the coronavirus pandemic. The April contract is currently up over $27 an ounce to $1,871.40 and the DG spot price is $1,863.60.
The Dow fell 200 points at the opening this morning on disappointing vaccine news out of Johnson and Johnson. The pharma company reported it’s single shot vaccine as 66% effective overall and appears less potent against other COVID variants.
In economic news, U.S. weekly initial jobless claims slightly to 847,000 last week, according to date released Thursday by the Labor Department. Economists had forecast 875,000 claims. Meanwhile, fourth-quarter U.S. GDP missed estimates to grow at a 4% annualized pace. Economists had predicted 4.3%. Full-year GDP fell 3.5%, the worst year for the U.S. since at least the end of World War II.
Improving the economy depends on vaccination against COVID-19, Federal Reserve Chairman Jerome Powell said at a news conference Wednesday.
“There’s nothing more important to the economy now than getting vaccinated,” he said. “The path of the economy will depend significantly on the course of the virus, including progress on vaccinations.”
The COVID-19 virus has killed more than 2.19 million people worldwide and sickened more than 101 million. About 25% of the cases — and 20% of the deaths — are in the U.S. The country has more than 25.4 million cases, more than any other nation.
Front-month silver futures rose 2.1% Thursday to $25.92 an ounce on Comex. The March contract gained 1.4% in the first four days of this week and is down 1.9% so far this month.. Silver surged 17% in December and 47% in 2020. The March contract is up over $1.45 an ounce this morning to $27.400 and the DG spot price is $27.28.
Spot palladium increased 0.7% Thursday to $2,342.00 an ounce. It lost 1.7% in the first four days of the week after declining 0.9% last week. It’s down 4.5% this month. Palladium rallied 2% in December and 26% in 2020. Currently, the DG spot price is down over $20 an ounce to $2,320.00
Spot platinum decreased 0.8% Thursday to $1,077.20 an ounce. It’s down 2.6% in the first four days of the week after gaining 1.4% last week. It’s up 0.3% this month. The metal added 11% in December and 11% in 2020. The DG spot price is currently up over $25 to $1,099.60.
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