Yesterday saw spot gold close completely unchanged, holding at $1,290 an ounce.
The yellow metal touched fresh five-month lows Friday morning. Gold slipped 0.15% to $1,288/oz in early trading.
Meanwhile, the silver price wiped out most of the previous day's gains. The argent metal lost 5¢ (-0.35%) to $16.34/oz.
Platinum was down 0.9% (-$8) to $881/oz while palladium was flat around $975/oz.
Trade Worries Continue to Weigh on Stocks
One of the factors weighing on the precious metals is, of course, the dollar. The greenback held near its year-to-date peak yesterday and traded up 0.3% to 93.7 on the DXY.
Wall St traded mostly lower for the second consecutive day. Only the small-cap Russell 2000 index closed in the green Thursday, advancing 0.55% to a new all-time high.
This likely reflects investors shifting their weighting to value stocks over growth stocks.
The Dow Jones nudged into positive territory this morning while the S&P 500 and Nasdaq were down 0.1% and 0.2%, respectively.
The possible trade war with China has continued to be a concern. Details emerging from talks being held in Washington suggest that China made a concession on sorghum imports but has not agreed to another key policy goal sought by the U.S. delegation: a reduction in the trade imbalance between the two countries by $200 billion over the next two years.
President Trump recently said the Chinese are "very spoiled on trade," something he has emphasized for several years.
In other trade news, negotiations over the North American Free Trade Agreement (NAFTA) were supposed to wrap up sometime in May, but that timetable is looking increasingly unlikely.
Inflation Outlook Muddied as Rates, Oil Rising
Bonds recovered slightly after tumbling for much of the week. The 10-year T-note yield dipped two basis points to 3.09%, narrowing the spread between the 2-year yield to about 50 bp.
Mortgage rates in the U.S. are also at their highest in seven years.
Given these mixed signals, there seems to be no clear consensus on how much higher interest rates will rise by the end of the year.
Canada's inflation rate, for example, fell to 2.2% in April. Compared to the U.S., inflation has also been significantly lower in the eurozone.
The dollar's strength sent the euro to new 2018 lows around $1.175. The British pound hovered just above $1.345.
Precious metal futures continued to point lower to end a bad week.
Crude oil prices prices were little changed Friday. Brent crude eased back below $80/bbl and WTI crude was modestly lower at $71.35/bbl.
In a sign that another crisis for global markets may not be far off, even the Pope waded into the debate. The Vatican officially condemned the use of credit default swaps (CDS), one of the bellwethers of the kind of financial engineering that many attribute to making the last crisis worse.
Admittedly, this seems a strange topic for the papacy to weigh in on.
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