Gold firmly above $2000, hitting a six-month high early Monday as the dollar weakened and speculation increased that the Federal Reserve would pause its series of interest rate hikes next month.
Investors were awaiting further direction from the release of the Fed’s favorite inflation report, the personal consumption expenditures price index, on Thursday. A weaker dollar makes gold more affordable for holders of other currencies and is typically seen as bullish for the precious metal.
Front-month gold futures rose 2% last week to settle at $2,023.50 an ounce on Comex, and the February contract increased 0.5% Friday. Markets were closed Thursday for the U.S. Thanksgiving holiday. Bullion is up 1.5% this month after gaining 6.9% in October and falling 5.1% in September. The metal is up 11% in 2023. The February contract is currently up $9.10 (+0.45%) an ounce to $2032.60 and the DG spot price is $2013.90.
The CME FedWatch Tool shows that 99.4% of the investors it tracks are betting that the Fed will keep its federal funds rate unchanged Dec. 13, while .6% are expecting a 25 basis point increase. The Fed has boosted interest rates by 5.25 percentage points since March 2022 to curb inflation to the 2% level. The Fed kept interest rates unchanged at 5.25% to 5.50% earlier this month.
U.S. business activity held steady in November, according to the U.S. composite PMI index released Friday. But employment in the private sector dropped for the first time in almost three and a half years, pointing to an economic slowdown in the fourth quarter.
In economic news this week, investors will also be closely watching U.S. consumer confidence data scheduled to come out Wednesday. The Beige Book report of the economic conditions in the Fed’s 12 regions is also due out Wednesday, and there are comments scheduled from various Fed officials. U.S. GDP for the third quarter also comes out the same day.
In addition to the PCE index, Thursday brings U.S. weekly initial jobless claims. On Friday, Fed Chair Jerome Powell is scheduled to speak, and the key first-of-the-month U.S. manufacturing report from the Institute for Supply Management will be released.
Front-month silver futures increased 2% last week to settle at $24.69 an ounce on Comex after the March contract rallied 2.7% Friday. Silver is up 7.6% this month after increasing 2.2% in October and decreasing 9.5% in September. It’s up 2.7% in 2023. The March contract is currently up $0.498 (+2.02%) an ounce to $25.190 and the DG spot price is $24.76.
Spot palladium gained 1.2% last week to $1,083.50 an ounce after advancing 2.2% Friday. Palladium is down 4.7% this month after dropping 10% in October and rising 3% in September. Palladium has plummeted 40% so far this year. Currently, the DG spot price is down $8.70 an ounce to $1076.50.
Spot platinum rose 3.7% last week to $938.40 an ounce after rallying 0.8% Friday. Platinum is down 0.4% this month after gaining 3.5% in October and declining 6.6% in September. Platinum is down 12% in 2023. The DG spot price is currently down $8.20 an ounce to $929.20.
