The spot gold price rose—and failed at resistance —in the $1,290 per ounce range this morning, falling back to about unchanged at $1,286/oz. Gold appears unlikely to break back above the strong resistance seen at $1,290/oz before today's session closes. In addition to looking forward to the weekend, today is also the final trading day of the third quarter. Accordingly, investors can expect some volatility on Friday as options and other contracts on Wall St expire, both for Q3 and for the month of September.
Platinum and palladium continued to trade in virtual parity around $920/oz early this morning. Palladium remained just slightly ahead of the pace. Meanwhile, the silver price lost 0.5% to trade at $16.75/oz.
There are the closing numbers from Thursday:
Gold: $1,286.70/oz (+$4.30, +0.34%) Silver: $16.84/oz (+12¢, +0.69%) Platinum: $923/oz (+$5, +0.54%) Palladium: $923/oz (-$1, -0.11%)
WTI crude: $51.59/bbl (-55¢, -1.05%) DXY: 93.10 (-0.33, -0.36%) DJIA: 22,381.20 (+40.49, +0.18%) S&P 500: 2,510.06 (+3.02, +0.12%) NASDAQ: 6,453.45 (+0.19, +0.00%)
The precious metals picked up ground thanks to a softer dollar yesterday. Crude oil prices stumbled, losing more than 1% on the day. The Nasdaq closed essentially flat while the S&P and Dow Industrials each edged higher. That trend was flipped on Friday morning, with the tech-heavy Nasdaq in the green while the other two indices lagged behind. The dollar was flat just above 93.0 on the DXY index. Global equities were higher for the most part, perhaps an indication of how kind the third quarter was to developed economies such as the U.S. and eurozone. Like gold and silver, bonds recovered from losses earlier in the week. The 10-year Treasury yield fell back to 2.30%.
The last major economic data released before Q3 comes to an end came from the Federal Reserve this morning. According to the Fed's personal consumption expenditure (PCE) index, the central bank's preferred gauge of inflation, consumer spending was weaker in August. The dip in spending (and, in the Fed's estimation, general price inflation) resulted largely from lower auto sales.
The PCE reading hasn't been above the Fed's 2% target since 2012. Over the past year, it has averaged just 1.4%. After rising throughout 2016, the "core PCE" measure has fallen from above 1.8% at the start of this year to just 1.3%. This data challenges the Fed's view that spending and inflation are recovering to pre-recession levels, which is seen as the main justification for raising interest rates.
The inflation reading may have some stifling effect on stocks today, but the quarterly expiry is more likely to drive trading. Any volatile action can safely be attributed to the attendant rush by traders to close out positions and rebalance portfolios.
The opinions and forecasts herein are provided solely for informational purposes, and should not be used or construed as an offer, solicitation, or recommendation to buy or sell any product.