Congratulations! Gold has just opened a new era... or, rather, reopened...
Gold reaches new 6-month maximum
On Wednesday, the yellow metal hit a new six-month maximum because recent risk-off sentiment attracted traders to the safe haven commodity, while American leader held fast in his insistence for border financing to reopen the US cabinet.
On the Comex exchange, February delivery gold futures went up by up to 0.45% ending up with $1,277.55 a troy ounce. By the way, it’s intraday maximum of $1,279.85 turned out to be its most impressive level since June 19.
Unlike American equities that faced their worst Christmas Eve performance ever, the yellow metal has been getting a bid in December because market participants take risk off the table at the end of 2018. As equities slipped on Monday, the number one precious commodity surged by 1%, finding itself on track for a 4% monthly ascend.
Political turmoil in the US government that provoked led to a partial government shutdown, was still in focus because Trump doubled-down on his pledge not to reopen the cabinet until he gets financing for his southern border wall. Following a Christmas Day video conference with American troops serving abroad, US leader told that he doesn’t know when the cabinet will be reopened. From his point of view, it makes no sense to have it reopened until the southern border wall with Mexico isn’t ready yet. The wall is expected to guard the United States from drugs leaking to the country from the neighbor through the border.
Some financial analysts pointed out that financial markets have to grapple with soaring turmoil in the US government that has increased political risk.
As for other metals, silver futures managed to tack on by 1.13% being worth $14.988 a troy ounce.
As for palladium futures, they jumped by 0.44% ending up with $1,181.25 an ounce. Platinum futures added 1.06% being worth $797.75.
The market optimism waned amid stricter restrictions to control rising coronavirus infections. S&P 500 and Nasdaq dropped from the all-time highs, while the USD jumped higher.
S&P 500 skyrocketed to the all-time high on optimism that Biden’s fiscal stimulus will support economic growth and boost corporate earnings.
PMI reports from the EU, the UK, and the USA will be released during the day!