Gold up on latest inflation data and as the dollar dips due to concerns that the U.S. stimulus package would be delayed after President Donald Trump condemned it.
The 12-month increase in the PCE index, the Fed’s preferred inflation gauge, fell to 1.1% in November from October’s 1.2%. Meanwhile, consumer spending fell 0.4% in November after a revised 0.3% gain in October and personal income fell 1.1% in November after a revised 0.6% decline in October. Economists had forecast a 0.3% decline.
The declines in the dollar made gold more appealing among holders of other currencies. But pressure came after Trump said in a video posted to Twitter that the $900 billion stimulus measure which passed Congress earlier this week after months of wrangling was a “disgrace” and hinted that he wouldn’t immediately sign the bill. Stimulus is typically seen as bullish for gold.
Front-month gold futures fell 0.6% Tuesday to settle at $1,870.30 an ounce on Comex. The February contract slipped 1% the first two days of this week. Gold is up almost $350 — or 23% — so far this year as investors have flocked to the metal because of uncertainty from the coronavirus pandemic and the economy. The metal is up 5% this month. The February contract is currently up over $4.30 an ounce to $1,874.60, while the DG spot price is $1,876.80.
The metal typically rises as a hedge against inflation triggered by economic stimulus measures, which is why the package was considered bullish for gold. It also has gotten a boost from the uncertainty to the global economy from the coronavirus pandemic, which continues to worsen, even as early vaccination efforts have gotten underway.
Both factors are likely to keep futures elevated just shy of the $1,900-an-ounce threshold. The front-month contract settled at an almost six-week high just below it on Thursday.
The COVID-19 virus has killed almost 1.72 million people worldwide and sickened about 78 million. About 23% of the cases — and 19% of the deaths — are in the U.S. The country has about 18.2 million cases, more than any other nation.
In economic news released Tuesday, U.S. consumer confidence tumbled in December as coronavirus cases rose. Optimism was at its lowest level since the summer in the gauge by the Conference Board. This morning, the Labor Department announced that the number of first-time unemployment-benefits filers decelerated to 803,000 in the week ending Dec. 19, much less than the expected 888,000.
Front-month silver futures fell 3.2% Tuesday to settle at $25.54 an ounce on Comex, and the March contract dropped 1.9% in the first two days of the week. Silver is up 13% this month and 42% this year. The March contract is currently up over $.15 an ounce to $25.690, while the DG spot price is $25.74.
Spot palladium gained 0.5% Tuesday to $2,329.50 an ounce and decreased 2.1% in the first two days of the week. It’s down 3.1% this month and up 20% this year. The DG spot price for palladium is currently up over $10 an ounce to $2,353.00.
Spot platinum decreased 0.9% Tuesday to $1,012.50 an ounce and has dropped 3% this week. It’s up 4.4% this month and 4.8% this year. Currently, the DG spot price for platinum is up $10 to $1,025.00.
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