Precious Metals Market Report by Bill Musgrave – American Gold Exchange
Gold edged slightly lower on profit-taking, holding above $1,224 and finishing the week 2.6% higher as investors sought safety from slowing global growth and plunging equities. It was the metal’s biggest weekly rise in more than two months.
China’s economy weakened in November, with demand, factory output, and business investment all slowing. The PBOC injected 400 billion yuan into the economy this week and is expected to add more monetary stimulus in the near future to drive faster growth.
Eurozone industrial output rose by a scant 0.1% in October, with production declining in France, Spain, and Italy while stagnating in Germany, the region’s largest economy. The data underscored ECB Chief Mario Draghi’s recent statement that downside risks remain in the Eurozone economy, further raising expectations that the central bank will launch Fed-style quantitative easing early next year.
Driven by the biggest drop in energy prices in a year, U.S. wholesale prices fell in November by more than forecast. Producer inflation was merely 1.4% year-over-year, the lowest since last February and well-under Fed targets. Soft inflation reduces pressure on the central bank to raise interest rates, lending support to gold by weighing on the dollar.
U.S. and global equity indexes sold off as tumbling oil prices and falling inflation undercut risk appetite despite reports that U.S. consumer sentiment rose in December to an eight-year high, largely because of plunging gasoline prices. Oil dropped another 4% today; the Dow lost 1.8%, and the Global Dow dumped 1.5%. European equity indexes tumbled to their biggest weekly losses in three years.
The other precious metals also slipped on the day but gained on the week. Silver dipped 0.1% for a 5.1% weekly jump. Platinum gave up 0.5% but gained 1.4% this week. Palladium surrendered 0.4% today but still rose 1.8% since last Friday.
At the Comex close: February gold dipped $1.50 to $1,224.10; March silver dropped 2 cents to $17.09; January platinum lost $5.60 to $1,236.50; and March palladium gave up $2.85, to $816.75 an ounce.