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Gold Faces Weekly Downturn Amid Easing Middle East Tensions
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Last week, gold notched its best week in nearly two years, as news of Ukrainian strikes inside nuclear-armed Russia spurred a flight to safe-haven assets. This week's trading days were shortened, as major U.S. markets were closed on Thursday in observance of the Thanksgiving Day holiday.
Stocks started the shortened trading week on positive footing, following a record close for the Dow Jones Industrial Average on Friday.The stock market rally continued on Monday amid news that President-elect Trump appointed former hedge fund manager Scott Bessent as the new U.S. Treasury Secretary. Markets cheered the appointment, as the Dow rose another 1% on Monday to a fresh high, while the S&P 500 secured its sixth consecutive daily uptick.
Meanwhile, gold dropped 1.5% on Monday, as news of a potential Israel-Hezbollah ceasefire dampened safe-have demand for bullion. As a result, gold ended the day near $2,622 an ounce, while silver fell by 1% to a closing price of $30.28.
On Tuesday, investors digested minutes from the Fed’s November meeting, which revealed that Federal Reserve officials were largely in agreeance over continued rate cuts, but that easing would occur at a “gradual” pace. The FOMC update was received positively on Wall Street, as the Dow and S&P 500 both touched fresh records. Elsewhere, gold bounced from a two-week low following news that President-elect Trump may declare trade tariffs on China, Mexico, and Canada.
Gold edged up again on Wednesday as the dollar index dipped by over 1%, making gold more appealing for foreign currency holders. On the same day, the U.S. Bureau of Economic Analysis (BEA), reported that inflation measured by the Personal Consumption Expenditures Price Index, jumped to 2.3% on an annual basis in October from 2.1% the month prior.Stocks slipped on Wednesday, as concern over stalled progress on the inflationary front dented investor sentiment.
Equities shrugged off Wednesday’s losses this morning, as the Dow and S&P 500 both rose to new highs, capping a strong month for stocks. The Dow Jones Industrial Average led the pack with a 2.4% weekly uptick, while the S&P 500 and Nasdaq Composite ended the week with 1.5% and 1.3% respective weekly gains.
Gold edged up again today amid a continued dollar decline and persistent geopolitical tensions. Still, the yellow metal ended the week 0.5% lower, at $2,650, while silver was flat on a weekly basis at $30.62.
