Gold ended last Friday at $2,414.89/oz., setting both a daily and weekly record close. The advance triggered more inflows into gold today, at least partly due to automated algo systems trading on momentum signals. Increased political uncertainty in the Middle East following the death of Iran’s president and foreign minister in a helicopter accident over the weekend, and rising optimism for a Fed rate cut this year are also underpinning gold prices which reached an intraday high of $2,449.89 today before encountering resistance at $2,450.00 (market technicians flock to round numbers).
Gold is +17.25% YTD, impressive except when compared to silver’s 32.79% YTD gain. Copper is +29.94% and tin leads all gains +34.77%.
The dollar’s daily spot returns are an even mix of gains and losses against the G10 currencies. A gain of 0.29% vs. the JPY and 0.38% drop against the SEK bookend the dollar’s performance. The dollar index is higher by an uninspiring +0.09% in narrow overnight ranges.
U.S. Treasury yields are higher by small margins in all tenors as traders monitor remarks from Fed officials today. Fed Presidents Bostic, Barr, Waller, Jefferson and Mester have scheduled events. Fed Funds Futures imply two 25bps cuts by the end of the year.
This week’s U.S. economic calendar includes Mortgage Applications and Existing Home Sales on Wednesday, Weekly Jobless Claims (this will be interesting given last week’s six-month high) and New Home Sales on Thursday, and Durable Goods Orders and Consumer Sentiment on Friday.
