Gold Snaps its losing Streak as Stocks Touch Record Highs

Last week, gold saw a modest weekly decline amid higher-than-expected inflation data and decreasing odds of a near-term interest rate cut. This week was shortened in terms of trading days, as major markets were closed on Monday in observance of the Presidents Day Holiday. The schedule of economic events for this week was lighter in terms of economic data. However, precious metals prices were driven by dollar index movements, while investors looked for monetary policy clues from various Fed officials.

 Gold and silver started the trading week off on Tuesday at $2,109 and $23.11, respectively. On the same day, gold jumped to a 1-week high of $2,031 as the dollar declined. Meanwhile, U.S equities stumbled following their first weekly loss in over month.

 On Wednesday, investors took in minutes from the Fed’s January FOMC meeting. The meeting minutes outlined concern over a potential slowdown in progress on the inflation front. As a whole, concerns surrounding persistent inflation outweighed worry over waiting too long to cut rates, as meeting participants voiced caution over cutting rates prematurely.

 Stocks were mixed following Wednesday’s meeting minutes, while precious metals saw little change. On Thursday, employment news was released which revealed that jobless claims fell to a 5-week low of 201,000, when 216,000 was forecasted by economists.

 The stronger-than-expected employment data lent support to the dollar index which, in turn, pressured bullion. As a result, gold and silver tumbled to their respective weekly lows of $2,015 and $22.56. Despite lessening odds of an early 2024 rate cut, gold managed to pare its losses today, as the dollar softened. At the same time, the yellow metal has enjoyed increased safe-haven inflows, as concerns over an escalating conflict in the Middle East weighed investors’ risk appetite.

 As this is written, gold is at $2,036 an ounce, which would be a 0.74% weekly uptick and an end to the yellow metal’s 2- week losing streak. Meanwhile, silver will see little weekly change at $22.93 an ounce. Wall Street stocks seemingly shrugged of Fed hawkishness, as all three major averages are headed towards weekly gains. Most notably, the Dow Jones Industrial Average closed at an all-time high of 39,131.53.

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