Gold Rangebound Near $1,800

Gold Rangebound Near $1,800

Gold rangebound near the $1,800 threshold on omnicron fears. The yellow metal returned to the tight range it had traded in before last week’s Federal Reserve announcement, with futures little changed early Wednesday.

Higher Treasury yields pressured the yellow metal, while fears of the spreading omicron variant of the coronavirus made it more attractive for investors seeking a hedge against uncertainty. Gold rose to the highest level in almost a month last week on the Fed’s new hawkish monetary policy stance and pandemic-related fears.

February gold futures slipped 0.3% Tuesday to settle at $1,788.70 an ounce on Comex. Front-month futures are down 0.9% in the first two days of the week. 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 5.6% so far in 2021. Currently, the February contract is up $2.40 (+0.13%) an ounce to $1,791.10 and the DG spot price is $1,795.30.

Global financial markets are closed Friday for the Christmas holiday.

Investors are awaiting the key U.S. core inflation data for November on Thursday for further direction. The U.S. consumer price index, a closely watched barometer on inflation, surged to a 39-year high of 6.8% last month.

The Fed’s policy shift was driven by soaring inflation levels. In addition to more rapidly scaling back asset purchases, the central bank signaled there could be as many as three interest rate increases next year to rein in inflation. But higher interest rates could ultimately be bearish for gold because they make the precious metal less attractive as an alternate investment.

In other economic reports this week, U.S. 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 due on Thursday.

Countries across Europe considered new lockdowns this week as cases of the omicron variant soared. U.S. President Joe Biden, in remarks Tuesday, appealed to all Americans to get vaccinated to prevent severe illness.

March silver futures increased 1.1% Tuesday to settle at $22.53 an ounce on Comex. The front-month contract is flat for the week to date, down just 0.4 cent. 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. The March contract is currently up $0.131 (+0.58%) an ounce to $22.660 and the DG spot price is $22.74.

Spot palladium rallied 2.9% Tuesday to $1,809.00 an ounce and is up 0.8% this week. It plummeted 13% in November after rallying 4.3% in October. It’s down 26% 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. Currently, the DG spot price has jumped up $36.40 an ounce to $1,844.50.

Spot platinum advanced 0.1% Tuesday to $940.90 an ounce, but dropped 0.9% in the first two days of this week. The metal dropped 8.1% last month after rising 6% in October. It’s down 12% so far this year. The DG spot price is currently up $16.20 an ounce to $956.00.


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