Gold down as dollar surges in early morning trading. The yellow metal extended declines early Monday after tumbling last week on rising bond yields and a stronger dollar after Donald Trump’s reelection to the White House. The dollar index rose 0.3% in early morning trading following last week’s weekly gain.
Investors are awaiting the release of key inflation data Wednesday for further direction and will be closely following comments from Fed officials this week.
The U.S. government and the bond market will be closed Monday for the Veterans Day holiday, and markets may be volatile because of low volumes.
Front-month gold futures fell 2% last week to settle at $2,694.80 an ounce on Comex after the most-active December contract slid 0.4% Friday. Bullion rose 3.4% in October after gaining 5.2% in September and advancing 2.2% in August. The metal is up 30% in 2024. The December contract is currently down $58.90 (-2.19%) an ounce to $2639.50 and the DG spot price is $2636.00.
The yellow metal tumbled last week after Trump was reelected and Republicans gained control of the U.S. Senate. Control off the U.S. House hasn’t yet been determined.
Separately, the Fed reduced its benchmark federal funds rate by 25 basis points Thursday to 4.50% to 4.75%, in line with economists’ expectations. Lower interest rates are typically considered bullish for gold. The Fed’s decision was the second rate cut in a row after a 50 basis point reduction in September. The Fed had previously kept rates at 5.25% to 5.50% for a year after raising them by 5.25 percentage points since March 2022 to rein in inflation.
This week will bring the latest inflation indicator, the closely watched consumer price index report for October, on Wednesday. The Fed closely watches both inflation and labor market data when setting monetary policy.
Investors also will be closely following remarks this week from Fed Governor Christopher Waller, Richmond Fed President Tom Barkin and Philadelphia Fed President Patrick Harker on Tuesday, as well from the presidents of the New York, Dallas, St. Louis and Kansas City Feds on Wednesday.
Most investors tracked by the CME FedWatch Tool are betting that the Fed will cut rates by another 25 basis points in December, ending the year at 4.25% to 4.50%. The rest expect the central bank to keep rates unchanged next month.
Front-month silver futures fell 3.8% last week to $31.45 an ounce on Comex after the December contract decreased 1.3% Friday. Silver advanced 4.3% in October after rallying 7.9% in September and gaining 0.7% in August. It’s up 31% in 2024. The December contract is currently down $0.709 (-2.25%) an ounce to $30.740 and the DG spot price is $30.80.
Spot palladium dropped 10% last week to $1,002.00 an ounce after it slid 2.9% Friday. Palladium increased 11% in October after gaining 3.2% in September and rising 3.2% in August. Palladium is down 10% this year. The current DG spot price is down $0.20 an ounce to $1000.00.
Spot platinum retreated 2.4% last week to $975.80 an ounce after falling 2.2% Friday. Platinum rose 1.5% in October after increasing 5.6% in September and sliding 5.2% in August. Platinum is down 2.2% this year. The DG spot price is currently up $4.30 an ounce to $980.80.
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