With unrest and uncertainty characterizing the global climate heading into the first round of France's presidential elections this weekend, gold prices moved marginally higher in early trading on Friday. Spot gold traded at $1,283/oz around 10 am EST in New York while silver prices were actually 15¢ per ounce lower at $17.85/oz.
Yesterday saw positive movement in the precious metals thanks in large part to a softer dollar. The USD was slightly weaker, trending under 100.0 on the DXY index, while the euro traded around $1.07. Encouraging corporate earnings reports from the first quarter helped lift stocks on Thursday, as U.S. indices rose nearly 1% on the day. The Labor Department reported that unemployment claims were at their lowest level in 17 years, which also gave a boost to the bulls on Wall St.
Gold rose $1.40 to close at $1,281.70/oz, yet silver actually lost ground, giving up 13¢ to close right at $18/oz. Platinum and palladium each posted strong performances, with the former gaining $13 an ounce to close at $978/oz. Palladium spiked $26 to once again close above $800/oz.
Oil prices have been hammered of late, with WTI crude futures finishing in the red for the fourth consecutive trading day. WTI lost 4% the previous day and is currently just above $50 per barrel. However, Brent crude actually moved higher on Thursday to settle near $53/bbl.
Aside from political uncertainty in Europe causing global investors concern, the news that tax reform may be on the table "soon" has also grabbed the attention of the markets. This was how Treasury Secretary Steve Mnuchin described the effort to overhaul the U.S. tax system that has been championed by President Donald Trump and his Republican colleagues alike.
Stocks initially got a lift from Mnuchin's comments, but there are many who remain unconvinced that changes to the tax system will be so easily won. Like much of the new White House's agenda, there are a number of obstacles to comprehensive tax reform that must be overcome if legislation will be considered this year. Economic advisor Gary Cohn seconded Mnuchin's feelings that tax reform would be tackled before 2017 is over.
The general atmosphere of uncertainty hanging over such reform efforts, not to mention disruptions in Europe and East Asia, have kept demand for government bonds strong this week. On Friday, the 10-year Treasury yield had eased back up to 2.23% after previously trading as low as 2.17%.
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