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Gold Crosses $1,300 Threshold As Factors Drive Up Futures

January 28, 2019 at 16:10 by Andrew Moran

Gold futures have crossed the crucial $1,300 threshold to kick off the trading week. The yellow metal found support in geopolitical news, an upcoming Federal Reserve meeting, and earnings season that has impacted the equities market. Gold prices are looking to maintain the momentum after last week’s modest advance.

February gold futures tacked on $3.20, or 0.25%, to $1,301.30 per ounce at 14:41 GMT on Monday. The last time the yellow metal touched the $1,300 mark was in June 2018. This comes as gold recorded a 1.4% weekly gain last week.

Silver, the sister commodity to gold, is flat to start the trading week. March silver futures were unchanged at $15.705 an ounce. The white metal also posted an impressive 2.2% weekly gain.

In the news, President Donald Trump announced that he would temporarily reopen the federal government for about two weeks. The president is seeking border security funding from House Democrats, but leadership in the opposition has promised that Trump will not get money for the proposed US-Mexico wall. The announcement briefly lifted stocks, until it was reported that the partial shutdown cost the national economy $11 billion.

Overseas, the UK will vote on another Brexit agreement that mirrors Prime Minister Theresa May’s previous deal. Most experts agree that the deal will be rejected.

Markets will pay attention to this week’s Federal Open Market Committee (FOMC) meeting and the language used by officials. It is widely expected that the Federal Reserve will refrain from raising interest rates for the first time in 2019. Despite a robust labor report, the central bank has taken a more dovish approach to rate hikes. According to the CME Group FedWatch tool, there is only a 1% chance of a rate hike.

On Friday, the US government will publish its January jobs report, and economists are estimating that 177,000 jobs were added. In December, the US economy added 312,000 new jobs.

All of these events sent the US dollar lower as the greenback shed 0.05% to 95.72. A weaker buck is good for dollar-denominated commodities because it makes it cheaper for foreign investors to purchase.

In other metals markets, March copper futures fell $0.035, or 1.25%, to $2.69 a pound. March platinum futures slipped $5.10, 0.62%, to $813.90 an ounce. March palladium futures plunged $25.40, or 1.92%, to $1,294.20 per ounce.

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