The precious metals are beginning the new year with technical tailwinds at their backs. After 2017 was dominated by a rising stock market and the emergence of cryptocurrencies, many traders appear to be seeking safer ground to start 2018. Spot gold jumped $9 (+0.75%) to $1,312/oz on Tuesday, better than a three-month high.
Spot silver also rallied 20¢ higher (+1.2%) to about $17.10/oz. Platinum was up 0.8% to $935/oz. The biggest winner was palladium, which celebrated the new year with a bang by surging 2.2% to $1,075/oz this morning.
One driver of higher precious metal prices was a slumping dollar. The DXY index fell 0.35% on Tuesday to 91.9, its lowest since September. Inversely, gold traded at its highest since September and reversed all of its losses during the fall and winter. With eight consecutive sessions in positive territory, the yellow metal is suddenly on its best winning streak since 2011. About a month ago, the gold market was stuck at its lowest since July.
The weaker dollar helped push the euro to a three-year high against the USD. The Japanese yen and British pound also advanced against the dollar. The losses for the dollar are a continuation of last year's trend, which saw the greenback tumble nearly 10%.
Wall St futures aimed higher on the first trading day of 2018 while the 10-year Treasury yield began the year slightly higher at 2.43%. Markets in Asia rose overnight except for Japan, where trading will remain closed for holiday for most of this week. European stocks fell. Traders on the continent prepared for the arrival of a new set of financial laws known as MiFID II (short for Markets In Financial Instruments Directive). The stricter regulations, which take effect tomorrow (January 3rd), largely deal with "dark pool" exchanges and greater oversight of such trading.
Despite protests erupting in Iran, crude oil prices remained steady. WTI crude held north of $60 per barrel and Brent crude stayed above $66/bbl. However, copper prices slipped 0.4% as volatility has picked up for the industrial metal. Bitcoin fell to start 2018, opening about 5% lower from Friday's close.
Looking ahead, manufacturing PMI will be released tomorrow and the meeting minutes from the FOMC gathering in December are set to come out tomorrow. The monthly nonfarm payrolls are due on Friday.
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.