Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinNew York spot gold rallied another 1.4% to close near $2,710 as the escalating Russia-Ukraine war and struggling Eurozone economy drove investors into safe havens despite upbeat US data and a shifting interest rate outlook. Bullion surged 5.6% this week for its biggest weekly jump in nearly two years. Silver rose 1.3% today and 3.1% this week to finish at $31.31 an ounce.

The HCPB flash Eurozone composite PMI fell to a 10-month low of 48.1 in November, with the workhorse economies of Germany and France slowing more than expected. Services fell to 49.2 while manufacturing retreated to 45.2, where readings under 50 indicate contraction.

Meanwhile, the S&P US services index rose to a 32-month high of 57 this month, driven by optimism about lower interest rates and expectations of a business-friendly Trump administration.

The dollar rose 0.4% against major rivals as the euro weakened and forex traders speculated that the Fed may pursue less aggressive rate-cuts in coming months. Resilience in the economy and the prospect of inflationary tariffs and tax cuts under President Trump have prompted Fed officials to voice caution about monetary easing in recent weeks.

Fed fund futures traders now put the odds of a December rate cut at just 56%, down from more than 80% little more than a week ago.

Benchmark 10-year Treasury yields pulled back as investors sought the perceived safety of government bonds because of geopolitical turmoil and economic weakness in the Eurozone.

The sharp escalation of tension between Russia and Ukraine has dominated the markets this week, propelling gold higher by nearly $144 an ounce. With President Biden’s permission, Ukraine fired US-made long-range missiles into Russia for the first time. In response, Putin lowered the official threshold for nuclear retaliation to include attacks using conventional weapons supplied by nuclear powers.

Platinum added 0.1% today and 2.7% this week. Palladium dropped 2.4% today but still gained 8% this week.

At the New York spot close: gold gained $37.80 to $2,7979.90; silver rose 490 cents to $31.31; platinum picked up a buck, to $966.20; and palladium shed $25.60 to $1,019.30 an ounce.