Wrap up the week with FunderPro
- Spot gold holds steady as the US dollar drifts lower
- US jobless claims fall, proving the job market remains resilient
Spot gold was up 0.04% Friday morning, changing hands at $1993/oz as the US dollar ticked lower. While the yellow metal advanced 0.7% for the week, US gold futures gained 0.07%, with December gold trading at $1,994 per troy ounce. The US dollar index (DXY) eased 0.1%, falling to 103 against a basket of six currencies, on track to close in the red for the second week in a row.
With falling treasury yields and a delicate dollar, gold found its footing, hitting a weekly high of $2,005/oz before retreating to more stable levels around the $1,994 mark. Although the US 10-year treasury yield inched slightly higher ahead of the Thanksgiving holiday, the bond yield has fallen more than 6.2% since the beginning of November. Influenced by a weaker buck, the drop creates perfect conditions for the bullion to shine.
Earlier in the week, the US Federal Reserve posted meeting minutes from their Oct. 31 – Nov. 1 gathering where they decided to maintain the current benchmark interest rate at a 22-year high of 5.25% – 5.50%. The decision reiterated the Fed’s hawkish commitment to wrangle inflation to a 2% goal from the current 3.2% – even if that means raising benchmark interest rates again.
Against that backdrop, weekly jobless claims dipped sharply, according to the US Labor Department. The number of American citizens applying for unemployment benefits plunged drastically from 209,000 to 24,000 for the week ending Nov. 18. The numbers overshadowed economists’ forecasts of 226,000 claims for the week. The stronger-than-expected data added to concerns that the labor market may not be cooling as expected.
With market makers expecting interest rates to stay higher-for-longer going into 2024, gold stands out as a “safe-haven” asset, as it is typically considered a hedge against inflation.
Despite a shorter trading week due to Thanksgiving, the key players in stocks are each looking to close the week in green territory. Taking Thursday out of the equation, the megacap S&P 500 rose 0.40% on Wednesday, notching a 1.07% gain since last week. The blue-chip Dow Jones Industrial Average advanced 0.5% by market close on the same day, achieving a lesser 0.9% increase throughout the previous five days. The tech-heavy Nasdaq outperformed its peers, soaring 1.15%, propelled by gains of 0.46% during its last trading session.
As this week closes out, we can look ahead to next week’s economic calendar. Personal Consumption Expenditure (PCE) and Core PCE data are set to be released next Thursday. The print offers insights into inflation across a range of consumer expenses and will reflect any changes in consumer behavior, such as replacing brand-name items for their own-brand counterparts.
To wrap things up, New York’s bell will close markets early today as the market closes at 1 p.m. ET in observance of Thanksgiving weekend and Black Friday. The long break offers plentiful opportunities for our active traders to conduct some technical analysis and reconsider strategies going into 2024. As we talk about gold, it may be time to consider diversifying your portfolio – in a dynamic and constantly evolving financial landscape, spreading your risk among different assets may serve as an effective risk management strategy.