Commodity Blog

Gold futures are finishing the trading week lower, but they are on track for an impressive weekly gain. Despite the real possibility of a US government shutdown, the yellow metal is tumbling on a strengthening dollar, positive economic data, and ballooning consumer sentiment. Gold is also poised to end the year down about 5%.

February gold futures shed $6.60, or 0.53%, to $1,261.20 per ounce at 14:20 GMT on Friday. Gold prices are retreating from their six-month highs, but they will post a weekly jump of 1.5%.

Silver, the sister commodity to gold, is also finishing the trading week in the red. March silver futures slipped $0.11, or 0.77%, to $14.75 an ounce. The white metal, which is on track for a weekly boost of about 1%, will post a 12% loss for 2018.

On Friday, the Department of Commerce posted its final reading of third-quarter gross domestic product (GDP). The initial forecast had been 3.5%, but the US government pegged the increase at 3.4%.

Durable-goods orders rose to an adjusted 0.8% last month, meeting median estimates.

The University of Michigan’s consumer-sentiment index recorded a final December reading 98.3, up from earlier estimates of 97.5.

Earlier this week, the Federal Reserve raised interest rates to a target range of 2.25% to 2.50%, but it did reduce its planned rate hikes for 2019 from three to two. This caused some investors to believe the central bank has turned dovish, citing disappointing economic data and the market rout.

There was a bit of reprieve on financial markets when New York Fed President John Williams said the Fed is “listening” to the concerns on Wall Street. He added that the central bank might reassess its plans for 2019.

We are listening, there are risks to that outlook that maybe the economy will slow further.

What we’re going to be doing going into next year is re-assessing our views on the economy, listening to not only markets but everybody that we talk to, looking at all the data and being ready to reassess and re-evaluate our views.

The positive data and remarks helped the US dollar as the greenback climbed 0.39% to 96.77. The currency will record a weekly decline of 0.7%, but it will complete the year 5% higher. A stronger buck is bad for dollar-denominated commodities because it makes it more expensive for foreign investors to purchase.

Meanwhile, it looks like the odds of a US government shutdown are high. The White House and Democratic leaders are in a battle over border security funding, particularly for the wall. President Donald Trump, who has promised a “very long” shutdown, wants $5 billion for the wall, but the Democrats say they will not give it to him.

In other metals markets, January copper futures dipped $0.01, or 0.45%, to $2.68 per pound. January platinum futures shed $3.00, or 0.38%, to $792.80 an ounce. January palladium futures cratered $30.60, or 2.57%, to $1,161.30 per ounce.

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