Gold futures closed lower on Thursday (Jan. 13) as markets came under pressure from rising U.S. Treasury yields. This is compounded by concerns that the U.S. Federal Reserve (Fed) may raise interest rates. However, the plan at the moment is that the QE program should end in March. After that, the labor market data will probably be the deciding factor on the timing of the increase in interest rates.
- The gold contract was down $5.9, or 0.32%, at $1,821.4 per ounce.
- Silver was down 4.5 cents, or 0.19%, at $23.162 an ounce.
- Platinum was down $7.9, or 0.81%, at $972.2 per ounce.
- Palladium was down $25.80, or 1.4%, at $1,890 an ounce.
The 10-year U.S. Treasury bond yield rose to 1.732%, putting pressure on the gold market.
Gold markets were also negatively impacted by several Fed officials advocating a March rate hike to curb inflation. However, the height of the increase will also be decisive here, as gold prices will become stronger, especially with a view to real interest rates.
In her speech yesterday before the Senate Banking Committee, Brainard said the Fed has the weapons it needs to fight inflation. “But inflation is too high, and working people around the country are concerned about how far their paychecks will go,” she said yesterday. She is right on target, as ordinary citizens see the price increases when they go to the supermarket or gas station. This further depresses confidence in politics.
According to the U.S. Department of Labor, the latest U.S. inflation data released last night showed that the Producer Price Index (PPI) rose 9.7% year-over-year in December. This is the highest level since the data was collected in November 2010. Core PPI continued to rise 8.3% year-over-year.
U.S. initial jobless claims have risen again. Last week, they rose to 230k. Analysts expected an increase of 200k.
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Friday, January 14, 2022