Gold prices saw moderate gains overnight, as the US dollar walked back some of its impressive recent gains. Gold ended the week with prices at a nine-month low, thanks to a rising dollar and inflation fears, which brought some bargain hunters and short covering into the trade today.
Spot gold is trading a half-percent higher this morning, as is spot silver. Retrenchment in the US dollar. after pushing too high too quickly, is giving commodities in general some breathing room today. The greenback ended the week at 13-year highs, after a 10-session rally sparked by "Trumpflation" bets. The President-elect's stated goals of tax cuts while at the same time greatly increasing government spending has driven inflation-sensitive markets wild.
Stocks on Wall St opened higher this morning, after closing with modest losses Friday. All three major indices closed 0.2% lower, but all three also managed to hang on to weekly gains. The Dow was the laggard, ending the week only 0.1% higher, as traders rotate out of expensive large-cap stocks and into small caps. The S&P 500 gained a respectable 0.8% for the week, while the tech-heavy Nasdaq doubled those gains to end the week 1.6% higher.
Stock prices are being boosted this morning by sharply higher oil prices. Reassuring noises from Iran, Iraq, and Russia regarding joining a possible agreement to limit oil production jolted oil prices more than 3% higher. Oil prices are building on the first weekly gains in a month, again on dreams built from rumors out of OPEC.
Another sector quite happy to see the dollar take a break is the bond market. The yield on the benchmark 10-year Treasury note is easing from its 13-month high of 2.355%, recorded on Friday. The US 10-year is not only paying more than its British, German, and Japanese counterparts, it's paying more than Italian or Spanish bonds. The extreme low risk to high reward ratio now offered by US debt has the many billions of investment dollars that had poured into emerging markets chasing yield dumping their holdings and rushing back to American Treasuries. This sudden selloff is inflicting serious pain on EM nations.
It seems that major bullion operations took advantage of the dip last week to restock. The US Mint reported that Gold Eagle sales were nearly double that of the previous week, 45,500 troy oz compared to 23,500. 1oz Gold Buffalo sales stampeded to 11,500 troy ounces last week, up from the previous week's 4,000 troy ounces. American Silver Eagle sales for last week were nearly quadruple that of the previous week. 1,688,000 ASEs were snapped up, to 425,000 the previous week.
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