Gold holding gains over $1,550

Gold holding gains over $1,550

Gold holding gains over $1,550 this morning, but is still headed for a weekly slip on new records in equity indexes. Meanwhile, palladium has hit another all-time high, over $2,450 an ounce.

This morning’s U.S. economic news has had little impact on the yellow metal. U.S. housing construction data is mixed with housing starts jumping up 16.9% to 1.608 million, well over the expected 1.38 million. However, the building permit data, which indicates future starts, was down 3.9% to 1.416 in December, off from the forecast of 1.473.

Earlier this week, strong U.S. economic data fueled the rally in equities. The Dow Jones Industrial Average, Standard & Poor’s 500 Index and Nasdaq Composite Index all reached new highs Thursday.

U.S. initial jobless claims fell for the fifth consecutive week, and investors see it as an indicator that the labor market is strong. The number of Americans filing applications for unemployment benefits declined by 10,000 to 204,000 in the seven days ended Jan. 11, according to seasonally adjusted Labor Department data released Thursday. Retail sales also rose for a third straight month in December, and a gauge of manufacturing activity in the U.S. Mid-Atlantic region jumped in January to its highest level in eight months.

The equities rally extended into the Asian day after official data Friday showed that China’s fourth-quarter gross domestic product rose 6% in the fourth quarter from the year earlier, an indication that the economy has stabilized.

February gold futures fell 0.2% Thursday to settle at $1,550.50 an ounce on Comex. They declined 0.6% in the first four days of this week. The yellow metal surged above $1,600 an ounce for the first time in almost seven years last week amid geopolitical tensions between the U.S. and Iran. Holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, rose 0.13% Thursday to 879.49 metric tons, Reuters reported. Currently, the February contract is up at $1,557.50.

Barrick Gold Corp.’s fourth-quarter gold production estimates also came in above analysts’ expectations Thursday as its Nevada Gold Mines joint venture with Newmont Corp. produced more of the yellow metal.

In other economic news, U.S. industrial production and consumer sentiment data are scheduled for release later Friday. The International Monetary fund is set to publish new global economic forecasts Monday, with Bloomberg reporting that the U.S.’s days as a pacesetter for the world’s economy may be over.

Silver slid 0.3% Thursday to settle at $17.94 an ounce on Comex. The March futures contract decreased 0.9% in the first four days of this week.

Meanwhile, palladium has hit another record high. Nikos Kavalis, founding partner of precious-metals consultancy Metals Focus told Barron’s that “Demand from the automotive sector has been growing as a result of tightening emissions legislation, most notably in China.” Futures for palladium consistently hit record highs in 2019, ending the year with a gain of almost 60% primarily due to lack of supply. Spot palladium, a metal used primarily in autocatalysts, was up 9.2% in the first four days of the week. It advanced 2.1% Thursday and is currently at $2,513 and ounce. Spot platinum fell 1.7% Thursday but is up 2.6% for the first four days of the week.

 

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