Gold retreats from one-month high, slipping just below $1,800 an ounce early Wednesday amid low liquidity during the shortened holiday week of trading.
The yellow metal was heading for a December rally, but not enough to make it positive for the year. Weaker U.S. Treasury yields bolstered the yellow metal Wednesday, but fewer risk-averse investors sought out gold as equities traded near record highs.
February gold futures rose 0.1% Tuesday to settle at $1,810.90 an ounce on Comex. Front-month futures fell 80 cents in the first two days of the week. Gold is up 1.9% so far this month after decreasing 0.4% in November. The yellow metal is up 3.1% in the fourth quarter and down 4.4% so far in 2021. Currently, the February contract is down $15.90 (-0.88%) an ounce to $1,795.00 and the DG spot price is $1,797.80.
Gold has gotten a boost in recent weeks from investors seeking to hedge risk from high inflation and the global spread of the omicron variant of the coronavirus. The latest inflation data from the U.S. last week showed it climbing at the fastest pace since 1982 in November.
In upcoming economic news, U.S. initial jobless claims come out Thursday, before financial markets around the world close Friday for the New Year’s holidays. Next week brings key first-of-the-month manufacturing reports from the major global economies as well as the U.S. monthly jobs report.
Tuesday, the S&P Case-Shiller index showed growth in U.S. home prices slowed for a third straight month in October.
The economic outlook will help determine whether the U.S. Federal Reserve follows through on hawkish monetary policy plans revealed earlier this month to tackle escalating inflation. The Fed more rapidly scaled back asset purchases and signaled that there could be as many as three interest rate increases next year. Higher interest rates could ultimately be bearish for gold because they make the precious metal less attractive as an alternate investment.
March silver futures increased 0.6% Tuesday to settle at $23.12 an ounce on Comex. The front-month contract climbed 0.8% in the first two days of the week. Silver is up 1.3% so far this month after falling 4.7% in November. The metal is up 4.9% in the fourth quarter, but down 12% so far this year. Silver prices are tied to industrial demand. The March contract is currently off $0.511 (-2.21%) an ounce to $22.610 and the DG spot price is $22.72.
Spot palladium rallied 1.7% Tuesday to $1,995.00 an ounce and is up 2% so far this week. It’s up 14% in December after plummeting 13% in November. Palladium is up 3.8% for the quarter and down 19% 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 is down $27.60 an ounce to $1,983.00.
Spot platinum advanced 1.3% Tuesday to $988.50 an ounce and is up 0.6% in the first two days of this week. The metal is up 4.5% this month after dropping 8.1% in November. It has gained 1.8% so far this quarter and is down 7.9% so far this year. The DG spot price is down $12.20 an ounce to $975.10.
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