Gold ticks up a bit under $1,800 this morning as the U.S. Dollar slightly weakens then steadies just under Friday’s 2-week high. Signs that inflation is persisting bolstered the yellow metal’s status as a traditional inflationary hedge as all markets keep an eye on this week’s Federal Reserve meeting.
The Dow rose to record high at the opening this morning. Investors’ optimism over a year-end rally was demonstrated when Dow futures rose 139 points. S&P 500 futures gained 0.3% and Nasdaq 100 futures added 0.2%.
Gold has been range bound on either side of the $1,800 psychological line for nearly five months. Analysts look to tomorrow and Wednesday’s meeting of the Federal Reserve policymakers as a potential game changer. The Fed is widely expected to start stimulus tapering measures at a meeting this week and provide further indications on the state of the economy. Decision makers at the central bank are likely to signal whether they still consider inflationary pressures temporary or if they feel compelled to act by raising interest rates sooner than anticipated. Interest rate increases are typically considered bearish for gold.
December gold futures fell 0.7% last week to settle at $1,783.90 an ounce on Comex after the front-month contract dropped 1% Friday. Gold advanced 1.5% in October after retreating 3.4% in September. The yellow metal is down 5.9% so far in 2021. The December contract is up $4.80 (+0.27%) an ounce to $1,788.79 and the DG spot price is $1,791.90.
The Fed’s favorite inflation index — the Personal Consumption Expenditures price index — stayed at the highest level in three decades in the year through September, according to data released Friday. It’s the fastest pace of increase since 1991.
Another key economic data point is due out Friday — the October U.S. jobs report out.
In other news, pandemic cases are beginning to drop in the U.S., an indicator that the pandemic may be winding down and the economy may be poised to recover. And U.S. President Joe Biden worked to address global supply chain issues on the sidelines of a G-20 summit over the weekend. Biden and other world leaders are set to attend a major climate conference Monday in Scotland.
December silver futures decreased 2.1% last week to settle at $23.95 an ounce on Comex after losing 0.7% Friday. Silver increased 8.6% last month after dropping 8.2% in September, its fourth consecutive monthly decline. The metal is down 9.3% so far this year. Silver prices are tied to industrial demand. The December contract is currently up $0.101 (+0.42) an ounce to $24.050 and the DG spot price is $24.10.
Spot palladium dropped 2% last week to $2,005.50 an ounce after retreating 0.3% Friday. It’s gained 4.3% in October after declining 23% in September. It’s down 18% so far in 2021. Palladium is feeling its oats this morning, though. The DG spot price is currently up $69.20 to $2,069.50.
Spot platinum decreased 2.3% last week to $1,029.20 an ounce after slipping 40 cents Friday. The metal rose 6% in October after losing 5.3% in September. It’s down 4.1% so far this year. Currently, the DG spot price is up $31.60 an ounce to $1,059.60.
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