Gold Slips on Record Stocks

Gold Slips on Record Stocks

Gold slips on record stocks this morning. Any other major shifts in gold likely await the monetary policy decision this week from the Federal Reserve and further signs the U.S.-China trade dispute may be resolved in the coming weeks.

The S&P 500 hit a record high this morning. CNBC reporting a break above the all-time high set over the summer. The S&P rose 0.6% to trade above 3,027.98, the record set on July 26, prompted by investors’ positive view of the U.S. China trade talks.

Bullion rose just 60 cents Friday to settle at $1,505.30, the highest level since Oct. 9. This morning, the December contract has slipped to $1,502.90. Futures advanced 0.8% last week and are up 2.2% this month, through Friday. Ten-year Treasury yields rose to a five-week high early Monday.

The Fed is widely expected to cut interest rates by 25 basis points for a third consecutive time when policy makers meet Wednesday. The CME FedWatch Tool showed early Monday that 94.1% of investors anticipate the cut with a 5.9% probability of no change. Last week, the European Central Bank left rates unchanged.

One of the key things investors will be watching for Wednesday are signals on whether Fed Chairman Jerome Powell sees the cycle of interest-rate cuts ending or continuing in December and into 2020, according to Bloomberg. After Wednesday, the next policy decision from the Federal Open Market Committee is scheduled for Dec. 11.

The U.S. and China both issued statements Saturday indicating that the countries are making good progress on the first phase of the trade deal they hope to sign in November, according to the South China Morning Post.

Both countries are scheduled to report key first-of-the-month manufacturing data at the end of this week, which may indicate how much the trade standoff has affected the world’s largest economies. The closely watched U.S. jobs report for October is also scheduled to come out Friday.

In other news, European Union ambassadors are set to meet Monday to consider extending the date for Britain’s departure from the bloc, currently scheduled for Thursday, according to the BBC. A draft text under consideration includes multiple possible dates, including the ends of November, December and January. An extension would give the U.K. Parliament more time to debate Brexit terms as well as to consider Prime Minister Boris Johnson’s plan to call an election in December to break a parliamentary deadlock.

Silver’s advance last week outpaced gold’s. The metal increased 0.7% Friday to settle at $17.93 an ounce on Comex, the highest closing price in a month. The December contract gained 2% last week and is up 5.5% so far this month. Both spot palladium and spot platinum rose last week, with palladium advancing 5.4% and platinum up 4.8%.


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