GOLD PRICE

The gold market is once again moving higher as risk aversion is on the rise. Stocks are seemingly running into a brick wall today after seeing record strong gains yesterday. The significant price swings appear to be a “new normal” and increasing volatility may be here to stay.

The gold market is on the offensive once again, with prices rising to a fresh 6-month high. Recent market turbulence is likely a major catalyst for gold’s recent upside, and prices appear poised to see further gains in the weeks and months ahead.

In October, home prices slowed down in 20 US cities, making it the seventh consecutive month to register a dip in the price of housing. This is the longest consecutive decline in the market since 2014 and demonstrates a lull in demand due to lack of affordability.

Happy Christmas Eve, traders. Gold spot-price is putting in new peaks this morning as we start off a weirdly-scheduled holiday week with a Monday half-session. With the Dollar, US Treasury yields, and WTI crude oil all slumping lower along with the stock markets, yellow metal is currently going for over $1266/oz in spot markets while silver tacks towards $14.75/oz.

Happy Friday, traders. It’s Christmas time! But first, what kind of week has it been? Gold prices have been where all the non-garment-rending action has been this week, especially post-Fed. 

Consumer spending defied expectations according to the University of Michigan’s final December sentiment index reading which rose to 98.3, with anything above 50 considered positive. Expectations had the reading at around 97.4, with a preliminary reading coming in earlier at 97.5.

Personal Income and Spending grew for November with a 0.4% increase in purchases compared to a forecast 0.3%, and a 0.1% increase in the PCE Index, a key index used by the Federal Reserve to help determine monetary policy around interest rates.

The stock market had another tough day on Thursday, with equities getting hammered once again in the aftermath of the Fed’s decision to raise the Fed Funds Rate on Wednesday by 25 basis points.

Durable goods orders jumped 0.8% in November after the steep 4.3% drop seen the month before, according to today’s government report. Market consensus had called for a 1.% increase. However, increased defense spending masked a 0.3% drop in core durable orders which excludes military aircraft and is a less volatile metric.

Yesterday afternoon the Federal Reserve raised the cost of borrowing by 0.25% for the fourth and final time in 2018. With the target range moved up to 2.5%, rates are now at the bottom end of what the FOMC considers as the “neutral range” of 2.5-3.5%, meaning the era of technically accommodative Fed policy has ended.

The Bank of Japan (BOJ)  has elected to maintain the current rate of interest with no change, as predicted by the vast majority of polled economists. Trade protectionism, falling oil prices, and increased sales taxes were all influential factors that will impede economic growth prospects for Japan in the near future.

Initial applications for unemployment benefits in the US dropped last week along with the four-week moving average for such claims, indicating strong activity in the tight labor market.